Economics

Table of Contents

TASK 13

Economics3

Scarcity3

Choices3

Opportunity Cost4

Microeconomics and Macroeconomics4

TASK 26

Demand Curves6

Individual Demand Curve and Market Demand Curve6

Firms Output Decision in short run7

Firms Output Decision in long run8

TASK 310

Equilibrium Price and Equilibrium Quantity10

Excess Supply and Market Equilibrium14

Excess Demand and Market Equilibrium15

TASK 417

Perfect Competition17

Features of Perfect Competition17

Oligopoly18

TASK 520

Keynesian Economics20

Monetarist Economics21

REFERENCES24

Economics

Task 1

Economics

Economics is the social science of making sufficient choices or decisions and studies how people interact in their society in an economic way. We live in a society where economics is a valuable need in order for us to understand and handle any problems that maybe occur in the future. Economic ideas contribute to the way our society is organized. That the kind of organization we have today has evolved gradually doesn't t make the principles behind it any less important. It evolved through history to the current arrangement, and is still changing and evolving. Social fabric is always likely to be changing. Many of the principles behind the current organization depend on economics and include many ideas(Hicks, 2001, Blaug, 2007, p. 347).

Scarcity

The basic economic problem is scarcity ; where people's wants and needs are unlimited, while the resources needed to produce goods and services to meet these wants and needs are limited. Every time a need is satisfied a new need is then created thus, creates the unlimited wants and needs of the human characteristic. The problem of scarcity results in allocation which is the process of choosing which needs will be gratified and how much resources we will use in order to satisfy them. Because there is so much wants waiting to be satisfied there is only so much resources to fulfill those wants. Limited resources is the condition of there not being enough resources to fulfill all wants and needs(Skousen, 1991, pp. 238-253). 

Choices

Since economics is all about making choices people must understand the cost and benefits of any given choice in order to make competent choices .Opportunity cost and Opportunity benefits guide the decisions process of individuals and countries and determine the goods to which they are going to be produced to. However, Opportunity cost is the option that you must give up when you make a choice and opportunity benefit is what you gain by making a certain decision(Samuelson, Nordhaus, 2004, pp.67-88).

Opportunity Cost

An example of opportunity cost and opportunity benefit is assume one night you have a stack of homework waiting for you to do but when your parents get home they demand that you go out with them to eat dinner and catch a flick afterwards. Yet you really want to do your homework and study but you give up your education time to spend the night with your parents. Your opportunity cost of this is what you give up and that is your study time however, you do gain a benefit from giving up your homework and that is a movie and a casual dinner with your parents(Varian, 1987, Stockton, pp. 461-63). Every society has basic economic questions and when responding to these questions societies must balance the needs of individuals with the needs of society together. The three basic economic questions are: What will be produced? How ...