Economics for business

Economics for business

Question 1

a) Why does choice arise in Economics? Use an example to discuss the concepts of choice and opportunity cost.

Economics is a social science whose primary focus is to use the scarce resources effectively. In order to do so? economists must make decisions. A decision made is a choice made. Choice can only be made when there are two things/commodities. There will be a commodity that will be the second best choice? as a result of the decision made. For example? a factory has resources to produce 50 units of clothes and 50 units of shoes. The manager decides (makes a choice) to produce 70 units of shoes and 30 units of clothes. The opportunity cost of producing 70 units of shoes is the 20 units of clothes (what we sacrificed.) remember that opportunity cost is the next best alternative foregone as a result of making an economic decision.

b) What do you understand by the law of demand? Pick a product and list two factors? which ? in your opinion? would cause the demand curve to shift to the right. Can you think of two other factors which would shift the supply curve of your product to the left?

As an entrepreneur? you probably spent some time trying to figure out how demand works. Lucky for you? economists have already done some of the thinking for you. This article will help you understand the law of demand by introducing the law of diminishing marginal utility? the income effect? and the substitution effect. The law of demand states that? all else equal? consumers will buy more and more at a given time period when price decreases and buy less and less as price increases.

Question 2

a) List your conditions of demand that are likely to cause the market demand of UK owner-occupied housing to shift. Give your reasons for choosing these factors of demand.

The UK owner-occupied housing markets have been shaped? since their inception? by their need to stay several steps ahead of counterfeiters. Recent years have been no exception and have spawned a UK owner-occupied housing range and complexity of security feature-rich cards. Coupled with this trend are the dynamic political realities giving impetus to more centralized manufacturing facilities? and it is the combination of these factors that is intensifying the need for automated inspection technology. Automated equipment engineers and manufacturers? Supertonics? recently pooled comments from several leading UK ...