StudentShare
Contact Us
Sign In / Sign Up for FREE
Search
Go to advanced search...

Principles of Economics - Essay Example

Cite this document
Summary
Introduction A clear understanding of economics is necessary in order to make sound decisions while undertaking any business transaction. This is mainly because, proper consideration ensures that one gets the best out of the resources he has. In some cases, exploitation may be executed which would have adverse effects on the development of a person or a business…
Download full paper File format: .doc, available for editing
GRAB THE BEST PAPER92.5% of users find it useful
Principles of Economics
Read Text Preview

Extract of sample "Principles of Economics"

Download file to see previous pages

The economic success of a country derives its roots from the works of individuals. As a result, when individual are well conversant with the principle of economics, overall success is achievable. This paper seek to give an in-depth analysis of how the realization that economic principles underlie the choices we make at a personal, business and societal level has sparked today’s growing interest in economics. Economic Principles Before a commodity reaches the hands of a consumer, it usually undergoes various stages of development.

Some of these stages include production and distribution. The entire process is referred to as economics and its contribution to development cannot be neglected. The economics principles usually give an overview of how the economy works. In the achievement of success, a proper understanding of the basics methods and concepts used by economist is necessary. Some of the principles of economics include: (A). Scarcity It is evident that the human needs are more than the resources available. As a result, not all the human needs can be satisfied at the same time.

In economics, there are two categories of goods namely, free goods and economic goods. Free goods are available free of charge in nature while economic goods are limited in their supply (Mankiv, 2011). As people have been enlightened about scarcity, they are able to make sound decisions on the available resources thus increasing their efficiency. This is favorable for economic development. (B). Rationality In life, not everything comes as expected. As a result, proper reasoning is very necessary in ensuring that one gets a proper understanding situation.

Making a rational decision is necessary, as it is optimal in achieving a goal. It usually takes into account all the merits and demerits before coming into a conclusion but taking into account the possible alternatives (Smith, 2008). By the people making sound decision, they are able to make proper economic activities and thus this has sparkled today’s growing interest in economics. (c). Preferences When a person is offered various items, he is likely to choose one out of the many. The decision to choose one is specifically dependent on an individual.

This is mainly derived from the person’s attitude towards the subject. In essence, preference is not static but dynamic over time. This is mainly determined by the person’s knowledge on the item. Because people are equipped with different preferences, they allow them to explore the utilities of all the available options (Loewenstein, 2007). Since by making preferences one increases the net utility, it directly and indirectly influences economic development. (D). Restrictions If a person was to be asked on the items he would desire in life to achieve his set goals and objectives, it is evident that there are always restriction that would hinder him from achieving them.

Some of restriction are clearly indicated in the budgets and input cost. For example, if the input cost is very high beyond the capability of a person, then he is bound not to undertake the transaction. Under such conditions, maximization is challenged. Therefore having clearly understanding how to maximize when restriction are there is necessary in ensuring that economic development is achieved. (E). Opportunity Cost This derives its roots from scarcity. Due to scarcity, the resources available to a person

...Download file to see next pages Read More
Cite this document
  • APA
  • MLA
  • CHICAGO
(“Principles of Economics Essay Example | Topics and Well Written Essays - 750 words - 1”, n.d.)
Principles of Economics Essay Example | Topics and Well Written Essays - 750 words - 1. Retrieved from https://studentshare.org/macro-microeconomics/1438978-economic-principle-underlie-the-choices-we-make
(Principles of Economics Essay Example | Topics and Well Written Essays - 750 Words - 1)
Principles of Economics Essay Example | Topics and Well Written Essays - 750 Words - 1. https://studentshare.org/macro-microeconomics/1438978-economic-principle-underlie-the-choices-we-make.
“Principles of Economics Essay Example | Topics and Well Written Essays - 750 Words - 1”, n.d. https://studentshare.org/macro-microeconomics/1438978-economic-principle-underlie-the-choices-we-make.
  • Cited: 1 times

CHECK THESE SAMPLES OF Principles of Economics

The Law of Supply and Demand as Big Principles of Economics

The paper “The Law of Supply and Demand as Big Principles of Economics” appeals to the pattern that the lower the price of a product or service, the higher the demand for it.... nbsp;… Supply and demand are two of the most important and fundamental Principles of Economics.... This paper is a critical evaluation of supply and demand as Principles of Economics....
5 Pages (1250 words) Term Paper

Principles of Economics The Theory of Consumer Choice

Principles of Economics The Theory of Consumer Choice Martin Sharkey Western International Question During 2004, the national average gas price rose from $1.... During 2004, the national average gas price rose from $1.... 0 a gallon to $2.... 5 a gallon.... The government has stated that the high price of gas will remain as it is....
2 Pages (500 words) Essay

How People Make Economic Decisions

xplain how the Principles of Economics affect decision-making, interaction, and the workings of the economy as a whole.... he Principles of Economics affects decision-making in that all decisions arrived at should seek to maximize the possible benefits and minimize the costs/drawbacks associated with them and thus they can be said to be economical.... Principles of Economics: being a revision of Introduction to economics.... principles of individual decision-making Informed consent- this principle aims at safeguarding individual's autonomy in decision making mutually in treatment and research setting....
2 Pages (500 words) Essay

The Principles of Economics Applied in Real Life

Slow Source Information: Trading economics; Bloomberg; June 5th 2009 room Topics: Law of Supply; Law of Demand The United States economy has been struggling a lot during past year due to the global economic recession that has affected all nations throughout the world.... om/economics/Unemployment-rate....
2 Pages (500 words) Essay

Economics Assignment

These market forces, to be precise the demand and supply schedules, on the other hand depend upon a large number of factors.... The vulnerability of market forces becomes… The present paper deals with a similar situation invoked out of a shortage in the supply of oil due to excessive usage and high Such a development is likely to hike the price of oil given that the demand for oil remains fixed....
4 Pages (1000 words) Essay

The First Principles

In his book The Wealth of Nations, he addresses Principles of Economics: specialization, division of labor, mutual gains from trade and freedom of trade (Smith, 2010).... In his book The Wealth of Nations, he addresses Principles of Economics: specialization, division of labor, mutual gains from trade and freedom of trade (Smith, 2010).... We address ourselves, not to their humanity but to their self-love, and never talk to them of our own necessities but of their advantages” is an elaborate explanation of the Principles of Economics....
1 Pages (250 words) Essay

Economics with a Touch of Whimsy

Along the curve, firm's output level stays Question Not long ago, the Canadian edition of a famous textbook on Principles of Economics had a diagram depicting a U-shaped average fixed cost curve.... et/economics/revision-notes/a2-micro-supply-shortrun-costs.... ??economics with a touch of Whimsy” http://www....
1 Pages (250 words) Essay

Main differences between perfect competition and monopoly market structures

Perfect competition refers to a market structure where buyers and sellers are many and are knowledgeable making any element f a monopoly not be in existence hence prices of commodities cannot be controlled by either the sellers or buyers (Marshall, 2007).... Perfect competition… Firms that are perfectly competitive have many competitors because they offer almost the same products....
4 Pages (1000 words) Essay
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.
Contact Us