Question

1: Write a passive response about why it is important for every person to know and understand economics

2: Describe how economics affects individual and organizational behavior. How does altering the incentives alter the behavior?

Please give a detailed and thourough answer. 300-500 words if possible

Answer 1

1. Certainly, economic literacy contributes to first class knowledge. People like to think about and talk about the economic issues that affect them as consumers , workers, producers, investors, citizens and in other roles that they assume throughout their lives. Economic literacy also provides people with the resources to understand their economic environment, and how to perceive events that may affect them directly or indirectly. Nations benefit from having an economically literate population, as it enhances the ability of the public to understand and assess critical issues. This understanding is especially relevant in democracies this rely on their citizens' active support and participation.

The development of basic economic literacy is an important goal for a democratic society that strongly relies on informed citizenship and personal economic decision-making. To achieve that goal it will be necessary to close significant gaps in youth economic education by giving economics a more central place in the school curriculum. More precollege-level economics coursework sets the foundation for economic literacy, but it is only the beginning.

2. Economic actors will participate in transactions frequently which they expect will make them better off. If a customer buys three dollars of a loaf of bread, he / she indirectly notes that they value the bread more than three dollars. By offering the loaf for three dollars, the seller implicitly states that the three dollars are more valuable than the bread. Probably, the general bread market in the area suggests that three dollars is an acceptable price for enterprises to become bread retailers and take the associated risks

Economics appears to be superficially concerned with abstractions such as curves in demand, frontiers of output possibilities or interest rates. In a tangible sense, none of those inputs do actually exist. The root, however, is always personalized human action. Each actor coordinates his activities at the same time in a meaningful, value-driven manner. Those values and actions are dynamically captured and subsequently analyzed using broad economic indicators.

Positive and negative incentives both affect the choices and behavior of individuals. Because people have different values, people's views of rewards and sanctions differ. An reward can also affect different people in different ways.
Incentive responses are predictable since people usually pursue their self-interest. Incentive changes are causing people to change their behavior in predictable ways. May be monetary or non-monetary incentives.