Thinking Like An Economist [University] [Instructor Name] Q.1) Trade barriers such as quotas, tariffs and exchange controls are employed by countries to distort market forces in order to give a comparative advantage to the domestic industry…
Download file to see previous pages...
Thus, trade barriers will reduce market efficiency. The reason is simple that the comparative advantage that is there in free trade system will be lost and the economies will have to produce each and everything for themselves which will not allow for specialization and the benefits gained from it. Each country has specific resources in form of labor, capital, technology and knowledge (skill) and these resources can be used to produce certain type of goods better than other type of goods. Thus, if each country is able to recognize what it can produce best, the whole world will benefit by producing only what it excels others at producing and exchanging that with nations that produce other things that they excel at thus allowing for larger number of each good produced for the same amount of resources. Other positives of free trade system include greater variety of goods and services, efficient use of the scarce resources and a greater competition for the domestic industry. Therefore, we can say that since having trade barriers causes the economy to produce inside its maximum potential with given amount of resources, that is, the production possibilities frontier, a reduction in trade barriers would mean production moving closer to the production possibilities frontier. ...
Q.2) An economy that is producing inside the production possibilities frontier is not realizing its full potential and there is a room for betterment. Such a situation, where the economy does not operate at its full potential arises in two situations: 1) when the economy is unable to employ all its resources of production, for example, labor available but not employed; 2) misallocation of resources. The production possibilities frontier tells us the maximum quantity of two products that can be produced using the current amount of resources. However, if available resources are not fully utilized, the output will be less than the full potential. Using 4 out of 5 machines available due to fuel shortage can be another example of underutilization of available resources. Misallocation of resources happens when an economy starts producing goods that it does not specialize in. This will require the particular nation to use comparatively more resources to produce the same amount of that good than a nation who has comparative advantage in producing that good. Had the nation employed the same resources in producing the other goods that it specializes in, the economy would have been better off by being on or closer to the production possibilities curve. The inefficient use of resources implies that the economy could be producing more without adding a single unit of labor or capital by allocating resources efficiently on the basis of comparative advantage (Tregarthen & Rittenberg, Chapter 2: Confronting Scarcity: Choices in Production, 2009). Q.3) Economic growth refers to the state where the production possibilities curve of an economy expands or shifts outwards. This means that the economy is able to produce more with the given amount of resources than it
...Download file to see next pagesRead More
Cite this document
(“Thinking Like An Economist Essay Example | Topics and Well Written Essays - 1000 words”, n.d.)
Retrieved from https://studentshare.org/macro-microeconomics/1453909-case
(Thinking Like An Economist Essay Example | Topics and Well Written Essays - 1000 Words)
“Thinking Like An Economist Essay Example | Topics and Well Written Essays - 1000 Words”, n.d. https://studentshare.org/macro-microeconomics/1453909-case.
Of course, these assets are convertible into tangible capital at a future date commonly determined by the holder. Investment advisors undergo hard and tiresome times when trying to provide a risk or return profile with a correlation of these assets in an attempt to come up with effective investment portfolios for their clientele (Rittenberg & Tregarthen, 2009).
Despite the tight security measures put in place to ensure information security, hackers develop more advance means and methods to compromise the security of a network and manage to access unauthorized information and resources. The sure way to to best ensure network security is by using the view point of a hacker.
Adam Smith also became closely identified with the laissez-faire market mechanism which asserts that a free market though appearing "chaotic" and "unrestrained" is the best factor which determines the right quantity of goods in a society. The operation of the so-called "invisible hand" is responsible for this mechanism.
An informed and well-written theological treatment of economics, the critique of our present social situation alongside God’s ‘law of the household’ is pulled together carefully and creatively. The topics of scarcity, property, work, and needs
Extinction of one or more species means that the ecosystem is destabilized and man will definitely feel the aftermath once the system fails to sustain human needs.
Just like mountains, environmentalists call for good co-existence of human beings, plants and other
The company is the largest single brand restaurant. The interest underlying selection of the company is in spite of being a single brand restaurant chain; the company has succeeded to expand globally.
On this day, I got an opportunity to think about the challenges facing many people, not only in my neighborhood, but in the whole world. In fact, I was perplexed to hear that the HIV prevalence is very high especially amongst the married couples.
For sure, this bulletin
Furthermore, he has won the prestigious National Medal of Science.
The Nobel Prize was because of his iconic contribution to the equilibrium theory. Equilibrium is an aspect whereby it becomes impossible to treat diverse markets as separate institutions. The model affects
1 Pages(250 words)Essay
GOT A TRICKY QUESTION? RECEIVE AN ANSWER FROM STUDENTS LIKE YOU!
Let us find you another Essay on topic Thinking Like An Economist for FREE!