Microeconomics is a branch of economics that studies the behaviour of individual homeowners and firms to make decisions on the allocation of limited resources and studies specific prices. It also analyses demand and supply of labour and analyses demand and offer of goods.
Economics is a technology that studies real human behaviour as a romance between ends and scarce means that have alternative uses. In addition, it the analysis of how men use limited resources in order to fulfill their unlimited wants and how humans make choices to make use of scarce resources to satisfy
1. Three basic economics problem and how the how the different monetary systems solve the financial problems.
There are three basic economics problem. The first one is 'what' which suggest what to do produce due to limited resources that have and what if the economy produce in order to meet consumer wants. For instance, a company want to create laptop or hands mobile which both have their own function or use to consumer or customer which send that maximises consumer satisfaction then your market is allocatively effective.
Second an example may be 'how will' which suggest the quantities to produce credited the demand from consumer or customer and because of the populace with resources that available since it one of the economy achieves productive efficiency if it produces goods using the least resources possible. For example, many consumer or user want buy hands cellphone than laptop, therefore the company should produce hands phone more scheduled the demand from consumer or end user.
Lastly, 'to whom' which signify to distribution, be based upon the circulation of income and rely upon who wish to pay or if the overall economy produce goods targeted towards those who have high earnings or those people who have low incomes and what type of demographic group if the goods throughout the market that are produced be targeted toward. For example, consumer or users that are happy and also pay or buy the produce that they want.
So, with if all three problems are dealt with at anybody time then the overall economy has achieved static efficiency. In the event the economy achieves static efficiency on the time period then it is dynamically useful. All these problems are concentrated around the situation of unlimited needs and limited resources which resources will be the factors of creation such as labour, capital, technology and land which are being used to produce the products that gratify the wishes.
There are also how the various monetary systems solve the economical problems. Different societies have performed these monetary functions, and wanted to achieve specialized and allocatively efficiency, in several ways. These ways can be grouped as different economic systems. The first new economic system was Capitalism or the market system. However, early on capitalism remaining many people in poverty, while competitive marketplaces decayed into monopolies. In response, public reformers developed choice financial systems. Fascism and Socialism attemptedto fix capitalism with a dosage of government participation. Communism simply sought to overthrow capitalism. It had been a struggle between the "invisible palm" of free marketplaces and the "visible hands" of the demand (organized) overall economy.
2. Scarcity, choice and opportunity cost
Scarcity refers to resources that aren't enough meet all wants which it want always exceed limited resources to gratify society. In other words, humans have unlimited needs which you can find never such a time that a human being is satisfied and not looking for anything. It also refer to the essential economic problem, and everything financial activities revolve around trying to solve this problem and the other attributes, a good which is usable but in numerous supply might not meet the requirements to be named an economic good. For example, air and normal water are just 'goods' in the sense they are readily available and can't be considered to be scarce.
Then, another concept in economics is that know as choice. Choice happens because of this of scarcity, and in a way, choice is prepared by these circumstances. Since human needs are unlimited and resources limited, it emerges that certain cannot be in a position to practically meet almost all their wants at anybody time and as a result of this, it becomes unavoidable for someone to choose between the many unlimited wants which o meet at any given moment. Since you make a choice to do something, or fulfilling a certain want, it turns out that at any one time, there's a certain want you need to ignore, or forego, in order to fulfil another want. For instance, you were deciding to increase carrot or potatoes which of them can be the choice to be foregone.
After that, the choice that is foregone is usually called an opportunity cost. Opportunity cost identifies second best option that has to forgone for another choice which give more satisfaction. For instance, if you opt to grow carrots, your opportunity cost is the alternative crop that might have been grown instead potatoes.
3. Four assumption in draw a production possibility curve (PPC)
PPC is often a graphical representation of the alternative combinations of the amounts of two goods or services an economy can produce by moving resources from one good or service to the other which can assists with identifying what quantity of your nonessential good or a service an economy can afford to produce without jeopardizing the required production of your essential good or service. In addition, it can be called as change curve.
There are four assumption in pull a PPC :
- Produced only two goods only
- Fixed amount of resources
- Full employment
- Constant technology
Example curve of PPC
There are also factors that can impact the PPC curve to shift. The first one is changes in the resources or factor of development. The influences are divided to two change which refers to, moving to the right this means increasing in PPC and shifting left which means lessening in PPC. For example is shown at below.
Assume: i. PPC1 and PPC2: Breakthrough of new resources in Poultry and Seafood.
ii. PPC3: Lowering in resources.
The second some may be changes in the level of technology. For instance is shown at below.
Assume: i. PPC1 and PPC2: Technology progression in Fish only.
The third is changes in financial condition which economical growth or financial recession. The influences are divided to two shifts which make reference to, shifting to the right this means increasing in PPC and shifting to the left which means lessening in PPC. For example is shown at below.
Assume: i. PPC1 and PPC2: Economical progress in the country
ii. PPC3: Economic recession in the country.
Lastly, changes in the amount of population. The influences are also divided to two shifts which refer to, shifting to the right this means increasing in PPC and shifting left which means lowering in PPC. For example is shown at below.
Assume: i. PPC1 and PPC2: Increasing in the country population.
ii. PPC3: Decreasing in the united states population.
4. Three type of income with diagrams and short run monopoly
Monopoly is a kind of market where there is a seller and large number of buyers. It also refers to retailing products that contain no close substitution and have a high access and exit barrier. You can find example because of this monopoly in Malaysia such as TNB and JBA.
There also characteristics for monopoly. The first one is one vendor and large number of buyer which monopoly exist when there is only firm exist which selling a product without any close replacement.
Next is not any close substitution which monopoly firm would sell a product which has no close replacement. Then, limitation of accessibility of new organizations which in monopoly market, there are rigorous obstacles to the access of new organization. Finally, advertising in monopoly market depends on the types of product sold.
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