In the simplest way, Economics is the studying of how money operates & how that capital is exchanged between consumer & the business. There are two main branches of economics.
Microeconomics is a branch of Economics which study how individuals or business firms allocate or manage scarce resources. Supply, demand, elasticity of price, quantity of demand & quantity of supply are some concepts of Microeconomics.
Macroeconomics flows on a wide area rather than microeconomics. It describes about the structure & the behavior of whole economy. It consists of larger concepts such as inflation of the country, unemployment, international trade & market, national demand etc.
Study.com. 2018. What is Economics? - Definition & Principles - Video & Lesson Transcript | Study.com. [ONLINE] Available at: https://study.com/academy/lesson/what-is-economics-definition-principles-quiz.html. [Accessed 06 January 2018].There are key principles of the microeconomics which are as follows,
1. Supply, Demand & Equilibrium
Demand is the quantity requirement over a product or a service on a specific price at a specific time period. The law of demand describes that Demand is more at lower prices than the higher prices while the other things being equal.…show more content…
In this essay, the author
Explains that economics is the study of how money operates and how that capital is exchanged between consumer & business. there are two branches of economics.
Explains that microeconomics is a branch of economics which study how individuals or business firms allocate or manage scarce resources.
Explains that there is a large number of buyers & sellers for each and every product or service. competition can be explained further as when firms have good amount of profit with higher supply another firm starts to catch the market.
Explains that elasticity is the response of a variable regarding to change in another variable. elasticity of demand describes the responsiveness of the quantity demanded against the price change.
Explains the term monopoly, where a single firm or an individual controls 25% or more of the specific market, and has less competition. that single seller or the firm is the controller and the price creator of that particular product or service.
Explains that market structure consists of different types of market systems, which are a result of capitalism. competition is the major regulator of the market system.
Explains that financial appraisal is done to find out whether the organization or the company is strong with the profit incomes and revenues to hold on to the co tenuous expenditure.
Explains that the key techniques used in financial appraisal in construction economics are net present value, benefit to cost ratio, internal rate of return, annual equivalent & discounted payback.
Explains that the npv is a good investment technique in financial appraisal as it adjusts for timing of project’s cash flow.
Explains that macroeconomics flows on a wide area rather than micro economics. it describes the structure & the behavior of whole economy.
Explains that the law of demand describes that demand is more at lower prices than higher prices while other things being equal. supply depends on factors such as number of suppliers, market demand for production, changes in technology, efficiency of labor involvement, government regulations.
Afterwards the findings are discounted and compared with the initial investment. A high ratio for the NPV is considered as a good result. With the higher ratios for NPV the company can be considered on investments and when lower the NPV is the same will be rejected. Because the company insufficiency to cover the expenditure or the cost occurring for the project. The NPV is a good investment technique in financial appraisal as it adjust for timing of project’s cash flow. With the value of NPV states that an investment should only take place when only having a positive NPV ratio which is a higher
Microeconomics is an important field of study in economics which looks at how people and companies make decisions when allocating limited resources within an economic system. (business dictionary, 2016) Separate from macroeconomics; microeconomics looks at how economic factors could lead an individual or company to make certain decisions.
In this essay, the author
Explains that microeconomics is an important field of study in economics which looks at how people and companies make decisions when allocating limited resources within an economic system.
Explains that "g. i" talks about a us government plan to raise the minimum wage for federal employees and the macroeconomic effect that the increase would have on the businesses and their employees.
Argues that a minimum wage increase would impact how individuals and companies make decisions to allocate resources.
Analyzes how argues that an increased minimum wage will affect the demand for the product because the affected firms’ must charge their customers more.
Analyzes how "g. i" believes the move to increase the minimum wage for employees of federal contractors is wrong because he believes that companies know their business best.
Explains that if the us government increases the minimum wage above the equilibrium point less people will be employed in the economy. federal contactors will cut their work force to cope with the expenses.
Explains that the us government has 100 hundred federal contractors that they use for everything from janitorial services to war plane construction. the microeconomic change will force executives to allocate limited resources to cope with the increased minimum wage.
Explains that shareholders of companies can be impacted by this microeconomic change because they will receive less return on their investments. the impact of the minimum wage increase may be small.
Explains that workers and their families are impacted positively and negatively by the minimum wage increase. the immediate impact of the increase will be a boast in employee moral, but long-term it will result in an increased workload for individual employees.
Explains that the government might be impacted by this increase because more people will be collecting unemployment benefits and drawing from other social programs.
Economics is basically the understanding of how different economies function. Economics is the study of how to best allocate scarce resources among competing uses. Scarcity in the economy is the main problem. There are not enough resources to keep up with the demand for them. Within the discipline of economics, there are two areas of study: Micro and Macro Economics.
In this essay, the author
Explains that economics is the study of how to best allocate scarce resources among competing uses.
Explains that microeconomics is the study of an individual economy, or of the different segments within the larger economy. the macroeconomic goal is to determine the impact of consumer spending on total output, employment, and prices.
Explains that economics is limited by the available resources that are used to produce goods and services. land, labor, capital, and entrepreneurship are the factors of production.
Explains that opportunity costs are the products that are given up for another product. production possibilities are alternative combinations of all final goods and services that can be produced in a given time period.
Explains that the main objective of economists is to maintain maximum output in production. smith believes that there is an invisible hand of economics that acts as the decider to all the basic three economic questions.
Explains that there are many opportunities for jobs, for those with an economic degree. the average starting salary for an economist starts around $27,000, which is not as good at the salaries of marketing and accounting.
The word ‘Economy’ is derived from the Greek word ‘okinomous’ which means one who manages a household. Economics is the study of how society manages to run its scarce resources. Scarcity means that society has limited or finite resources and therefore cannot produce all of the goods and services people desire to have. God has created man with innumerable desires and wants. So, unlimited wants surround man throughout his life without having an end till the death of his life. But if the human wants were limited, he would have been able to satisfy them easily and the society would be getting optimal benefits from its scarce resources which is called ‘Efficiency’ in economics. Economics also assumes that normally people are rational and they weigh their costs and benefits before doing any action. But to know how people preferences and decisions change, economists give them incentives. An incentive is something that persuades a person to react. So in economics scarcity, efficiency and incentives play a very important role in making conclusions and decisions.
In this essay, the author
Explains that economics is the study of how society manages to run its scarce resources. scarcity, efficiency, and incentives play a very important role in making conclusions and decisions.
Explains the scarcity principle in economics, which states that having more of one good necessarily requires having less of another good.
Explains that in order to take decisions and optimize individuals people gauge their own costs and benefits.
Analyzes how adam smith's 'inquiry into nature and wealth of nations' gave the idea of the invisible hand and reflected the concept that even though self-interest is the prime mover of economic activity, the end results from an allocation of goods and services that serves society’s collective interest remarkably well.
Explains that people's preferences and choices alter with time, income and many other resources. an incentive is something that persuades a person to act.
Concludes that scarcity, cost-benefit or incentive principles help the economists, people and markets allocate resources in a proper way.
Economics is the study of how best to allocate scarce resources throughout an entire market. Economics affect our lives on a daily basis, whether it is on a business level or a personal level.
In this essay, the author
Opines that sports are one of the most profitable industries in the world. the economics involved with sports has drastically changed over the last ten years.
Explains that sports has undergone a whole new renovation in the past few decades. it isn't just an activity that is played for fun.
Explains that economics is the study of how best to allocate scarce resources throughout an entire market. sports have become a business entity rather than an entertainment industry due to the strong economic impression of the overall industry.
Explains that sport is a business, which relies heavily on the involvement of society, and business within to be successful. there are several areas and economic factors that must be taken in to consideration when looking at the outstanding success of sports
Explains that economics is the study of how best to allocate scarce resources among competing uses. it is concerned with the production and use of goods and services.
Explains the limits of technical knowledge, productive resources available, organizational patterns, behavior, and law imposed by social custom and more. the ability of an economy to satisfy the gals of its members within the constraints set by these constraints depends on efficiency.
Explains that scarcity creates the necessity of making choices among alternatives, which is one of the central themes of economics.
Explains that most behavioral situations involve play. workers compete for higher paying positions, groups of individuals form teams (firms) and compete against other teams for consumers' dollars.
Explains that sporting events qualify as play, but the importance of play as fundamental economic behavior changes this perspective. sports become an arena of pure economic activity.
Explains that the pga has a unique pay structure when it comes to athletes. many critics in the past said that this structure was going to fold.
Opines that finchem admits that competing for the sports dollar long-term is much more challenging now than it was five years ago.
Explains that only the top players in each individual tournament receive pay and there happened to be different players almost every time. last years only six of the 326 players on the pga tour money list-made more than $1 million.
Explains that there are a few economic problems within the sports industry. one major problem is called competitive imbalance.
Explains that competitive imbalance is an economic problem because a team can't afford to pay the big dollars required to sign star players. this is evident in baseball, where the top 20 percent of major league teams won an average of 93.7 games.
Explains that attendance in all four major sports has gone down over the past few years due to more sports programming available on free or cable television. however, ticket prices are too high.
Explains that the minnesota twins' payroll for this year is only around $18 million, so it is almost impossible for them to compete with teams like the new york yankees who's payroll is around $75 million.
Opines that to solve competitive imbalances, there must be higher revenue sharing and luxury taxes for teams with payrolls over a certain amount. to solve the problem of falling attendance, the obvious answer is to lower ticket prices.
Explains that sports is a profitable industry and that sponsorship is profitable for both the sponsors and the team.
Explains that merchandising is another way to make a profit in sports. it includes everything from clothing and apparel to books and video games.
Explains the third way to make a profit in sports is through broadcasting rights. television and radio networks pay to have the rights to broadcast certain teams, which benefits both the team and the broadcaster.
Explains how the new york yankees made a lot of money from their 93 million dollar contract with adidas. they also made over $20 million from yankee merchandise sales.
Explains that sport can be a very profitable industry for sponsors, merchandisers, and television broadcasters and for professional teams.
Explains that television has been the primary way that sports fans can gather information about their favorite sports. the neilsen ratings tell how popular the program is and how many people are watching it.
Explains that the decline in popularity of watching sports on tv began in 1994. baseball was in the midst of one of the greatest seasons it had in a long time. the expos were dominating baseball with an amazing record.
Explains that the strike lasted into the march of 1995, canceling the world series for the first time since 1903. the fans were not as forgiving as the teams expected.
Explains that baseball had resurgence in popularity in 1998, when the all-star game came around, there were two players who had the opportunity to break the single season home run record.
Analyzes how the super bowl, nba finals, and world series will be affected by a decrease in advertising.
Explains how the nba's biggest star, michael jordan, had much to do with its success. with his presence, tv ratings skyrocketed.
Explains that when dealing with college sports tv ratings, people can easily get confused. local stations will continue to show local college coverage, but large stations such as nbc and cbs will cover big names.
Opines that if there were a decrease in tv ratings, it probably wouldn't affect the fans and their perspective of college sports.
Opines that the trend of a decrease in ratings in the long run can hurt the sports industry not so much on the college level, but in professional level sports.
Explains that in sports, management is responsible for the success of individual organizations and leagues or associations, and disseminates rules and regulations to individuals to ensure smooth transition from loss to profit.
Explains that in sport, there are several types of labor costs, which discourage a manager from making an easy logical decision to make an economic business decision.
Explains that player's salaries are the largest expense which organizations have to deal with. the increase in profits is due to the structure of the negotiations processes for each league.
Explains that travel costs are another large cost for teams to incur. the nba will cost less to travel than the nhl, and there are also coaches, equipment, trainers and sometimes family.
Explains that a team must also factor in game day expenses, such as field maintenance, security, ushers, facility management, and facility rental fees.
Explains that player development is a key tool in professional sports. the nhl, mlb, and mls all have minor league systems, which they fund.
Explains that the average administrative cost per team is approximately $3 million. without the players, there would be no need for an administrative team.
Explains how management offsets costs and turns them into profits, and how corporate sponsorships, partnerships, mergers with other businesses and media generate new revenues for professional sports.
Explains that the average media revenue is anywhere from $7 million in tv contracts and $8.5 to $13.4 million per team for national media. the dallas cowboys logo sells far more than the cincinnati bengal's.
Explains that ticket sales generate 25.9% of baseball revenues, 18.3% in the nba, 16% in nfl, and 22.3% of nhl average revenues. media generates 20.7% of all sports revenue, while stadium revenues are minimal.
Economic is the social science that studies the production, distribution and consumption of goods and services.
In this essay, the author
Explains that the first tactic manages the money supply, which involves buying government bonds or selling them.
Explains the second tactic of managing money demand. money demand, like most things, is sensitive to price.
Opines that the promotion of tourist influxes or real tourist expenditures improves economic growth, so policymakers must continue with policies that endorse the country as the preferred tourist destination.
Explains that managerial economic is the application of the economic concepts and economic analysis to the formulating rational managerial decisions.
Explains macroeconomics, while micro economics analyzes the market behavior of individual consumers and firms in an attempt to understand the decision making process of forms and households.
Explains that monetary policy controls the supply of money, often targeting an inflation rate or interest rate to ensure price stability and general trust in the currency.
Explains that banking systems use fractional reserve banking to encourage the use of money for investment and expanding economic activity. open market activities, setting banking system lending or interest rates, and setting bank system reserve requirements are the "normal" methods used by central banks to ensure a passable money supply.
Explains how unconventional monetary policy affects the risk held by financial institutions in three ways: by changing the hurdle rate for risky projects, by general equilibrium effects on asset values and product demand, and by increasing leverage.
Explains that the automotive industry is an important part of macroeconomic analysis as it has a large impact on national and regional cyclical economic activity.
What is Microeconomics? This question was left unanswered when I initially enrolled in this course. Microeconomics is the social science that studies the implications of individual human actions, specifically about how those decisions affect the utilization and distribution of scarce resources. Microeconomics shows how and why different goods have different values, how individuals create more efficient or more productive decisions, and how individuals best coordinate and cooperate with one another. Microeconomics does not try to explain what should happen in a market, but instead only explains what to expect if certain conditions change. For instance, If the price of the new iPhone 8 is higher than the previous model will the consumer buy it? There are several elements that will play into getting an answer for this question, but gives you a general idea of what microeconomics entails.
In this essay, the author
Explains that microeconomics is the social science that studies the implications of individual human actions, specifically about how those decisions affect the utilization and distribution of scarce resources.
Analyzes how the definition of microeconomics was presented at a high level, and how it correlated to their everyday life. professor julie pelia assigned them topics that engaged their minds.
Explains the two types of economic systems that a society adheres to: the command system and communism.
Explains the market system, or capitalism, is a privately owned economic system based on markets and price. it is exercised in the united states.
Explains that supply and demand are arguably the most fundamental concepts of economics and is the backbone of a market economy.
Explains that oil companies are able to increase their price at will, and the consumer still purchases is due to the elasticity of the industry.
Analyzes the impact of the philadelphia tax hike on beverages with sugar, which was implemented to reduce the amount of people drinking sugary drinks.
Explains that philadelphia's neighboring counties allow residents to avoid the beverage tax, which in turn hurts the supermarkets/local stores and ultimately resulted in layoffs and businesses closing due to the decline in sales.
Explains that a federal tax system consists of two types of tax systems: the progressive system and the flat tax system.
Explains that wages are the monetary compensation paid by an employer to an employee in exchange for work done.
Opines that microeconomics on a large scale can be complex, but when you dive deeper into what it involves any and everyone can build some sort of coloration to their everyday lives.
From the above definition we can understand that economics focusses on the problem of understanding and dealing with scarcity- the problem of fulfilling the unlimited wants of humankind with limited and/or scarce resources. Because of scarcity, economies need to allocate their resources efficiently. In order
In this essay, the author
Explains that in order to understand the cardinal utility concept, they will first try and understand utility, and further look into why in economics it plays such an important role.
Defines total utility as the total satisfaction obtained from the consumption of all possible units of a commodity.
Explains that marginal utility is the satisfaction gained from consuming another quantity of a good or service.
Describes the assumptions that go into the cardinal utility theorem before trying to understand it.
Opines that the law is not applicable in case of knowledge. reading of books provides more satisfaction and knowledge to the scholar.
Explains that the law is not applicable in case of indivisible goods. the consumer is unable to divide the goods to adjust units of utility derived from consumption.
Explains that there is no measurement of utility. it is a psychological concept and cannot be expressed in quantitative form.
Opines that the law does not hold well in case fashion and customs. people like to spend money on birthdays, marriages and deaths.
Explains that the maximization of utility is not possible due to low income.
Explains that the law is not applicable in case of durable goods. the calculation of marginal utility is impossible.
Explains that the consumer is bound to use commodity, which provides low utility due to non-availability of goods having high utility.
Explains that there are certain lazy consumers who don't care for maximum utility. the law fails to operate in case of laziness of consumers.
Explains that it does not work when there are frequent prices changes. the consumer is unable to calculate utility of different commodities.
Explains that there may be unlimited resources, but the does not work due to infinite resources. there is no need to change the direction of expenditure when there are gifts of nature.
Explains that every consumer wants to get maximum satisfaction out of his limited resources. he must substitute the thing of greater utility for one possessing less utility till marginal utilities are equalised.
Explains that businesses and manufacturers work towards the most economical combination of factors of production employed by hm. they will substitute one factor to another to maintain their marginal productivities.
Explains that in all our exchanges, this principle works, for exchange is nothing else but substitution of one thing for another.
Explains that it is assumed for cardinal utility theorem that all utilities are measurable and quantifiable, but in actual scenario, it can't be measured in such quantitative terms.
Explains that the utility for various goods is not dependant on each other. the utility derived from tea is greater than that of coffee.
Explains that marshall's demand theorem and constant marginal utility of money are incompatible except in a one commodity case.
Defines economics as a social science concerned with description and analysis of the production, distribution, and consumption of goods and services.
Explains that utility is an economic term referring to the total satisfaction received from consuming a good or service.
Explains how neo-classical economists developed the cardinal utility concept to measure the utility derived from a good. they gave the concept of ordinal utility of measuring utility.
Explains that neo-classical economists devised the concept of cardinal utility concept wherein all utility is considered cardinal or measurable, just any other mathematical or physical parameter.
Explains that utility is a cardinal concept, wherein one can express the utility of any good in terms of the amount of satisfaction he gains from it.
Explains the hypothesis of independent utilities, which implies that the total utility achieved by the consumer is the sum total of all the separate utilities of the goods.
Explains that while the cardinal utility of commodities diminishes as more good is purchased, the same doesn't hold true for the utility of money. the unit of measurement of money itself varies with amount.
Explains that introspection is the ability of the observer to reconstruct events which go on in the mind of another person with the help of self-observation.
Explains the law of diminishing marginal utility, which refers to the common experience of every consumer.
Explains the significance of the diminishing marginal utility of a good for the theory of demand.
Opines that due to multiplicity of wants and scarcity, wants are competitive. we always tend to balance the marginal utility of the commodity and that of money.
Explains that every human wants to make the best use of his or her resources. the law of equi-marginal utility is also called the consumer's equilibrium.
Explains that a consumer has money income of rs. 24 to spend on two goods. he will equate the marginal utility of the last rupee (i.e.
Argues that the cardinal utility analysis assumes that when a consumer spends varying amounts on good or various goods, marginal utility of money remains unchanged.
Opines that cardinal utility analysis does not split up the price affect into substitution and income effects. it doesn't differentiate between the income effect and substitutional effect of the change in price.
Explains that marshall could not explain the giffen paradox by not visualizing the price effect as a combination of substitution and income effects.
According to Freakonomics, economics is the study of incentives because incentives are the core of every action, influencing and guiding humans when making decisions.
In this essay, the author
Explains freakonomics' definition of incentives, which describes the exact situations economists are interested in. economics studies how individuals behave when facing certain situations and how they react when they need or want something that is contemporarily wanted or needed by somebody else.
Definition: Economics is the study of how individuals, firms, companies, and nations make choices on distributing scarce resources to satisfy as much of their wants as possible.
In this essay, the author
Explains that land includes natural resources and are normally used as raw materials.
Explains that air, soil, and water are all considered as land, since they are not produced by humans and can be used in production of many different kinds of goods.
Explains that money does not count as capital in the production because money cannot be used directly to produce products.
Explains that businesses have to use buildings or machines to produce. buildings count as physical assets that will not depreciate a lot.
Explains that human capitals can transform raw materials into consumer used goods and provide services to businesses.
Explains that any worker counts as labor. farmers transform raw plants into rice or bread which can be directly consumed by consumers.
Explains that a measure of the values of what individuals own includes the amount of money and physical assets one has.
Explains that a house can be considered wealth, since the amount of money that it is worth is the wealth that one has. physical assets are better than cash since physical assets can still be used.
Explains that capital goods are normally bought to produce more consumer goods.
Explains that buildings are considered capital goods, while businesses use human and land to produce more products.
Defines consumer goods as goods that consumers can directly buy and use. consumer goods are usually the end results of capital goods.
Explains that any food can be considered as consumer goods. consumers will purchase burgers and directly consume them.
Explains that needs are the things required for individuals to live. without needs, individuals may die.
Explains that wants are goods or services that are not required or necessary to maintain basic living, but what people desire in addition to the needs.
Explains that entertainment, luxury goods, cars are not required for basic living, but simply what people desire in addition to basic needs.
Explains that economics is the study of how individuals, firms, companies, and nations make choices on distributing scarce resources to satisfy as much as possible.
Explains that the study of economics is important for understanding the limited amount of resources the earth can provide, so people can make better choices on answering the three basic economic questions.
Explains that apple, car, computer, etc., provide utilities for consumers who purchase them.
Explains that services are an example of intangible goods. the consumers of the services don't own them.
Describes the services that doctors provide in hospitals, and the education provided by teachers in schools.
Explains that scarcity refers to the limited nature of resources while human wants are unlimited.
Explains that petroleum is a non-renewable natural resource. if all petroleum are used up by humans, it will take an extremely long period of time for new petroleum to be formed.
Explains that shortages can be caused by government policies and natural disasters.
Explains that when the lands in a country used to grow wheat experience severe drought, the quantity of wheat produced for the country would drastically decrease.
Describes the factors of production that are used to produce certain products or services.
Explains that human resource is considered as labor. it will work for the factory and transform raw materials to consumer goods.
Explains that physical capitals are assets that individuals can use as a factor of production.
Explains that a building can be considered as physical capital. individuals can use the building to set up their company and produce products.
Defines human capital as knowledge, intelligence, talent, ability to perform labour (transforming raw materials into consumer goods) and produce economic value.
Explains that an individual who is very good at cooking can become the chief of a restaurant. their knowledge, intelligence, and ability to cook contribute to the business's production of food.
Defines a person taking the risk to organize and distribute resources in order to produce certain products and make profits or economic gains.
Illustrates how bill gates is a great example of an entrepreneur. he used his knowledge on computers and organized his resources to open up microsoft, which is an extremely successful company.
According to McGutgan and Moyer: “Managerial economics is the application of economic theory and methodology to decision-making problems faced by both public and private institutions”. McNair and Meriam: “Managerial economics consists of the use of economic modes of thought to analyze business situations”. Spencer and Siegelman: Managerial economics is “the integration of economic theory with business practice for the purpose of facilitating decision-making and forward planning by management”. Haynes, Mote and Paul: “Managerial economics refers to those aspects of economics and its tools of analysis most relevant to the firm’s decision-making process”.
In this essay, the author
Explains that managerial economics provides a logical and experiential framework for analyzing the question such as "what or how much should i produce, and for whom?", or "should i try to retail or whole sale?"
Explains that managerial decisions are an important component in achieving the objectives of the organization.
Explains that managerial economics encompasses all the problems and areas of management and a firm. decision-making, forecasting, demand analysis, capital management, and profit management are considered.
Explains that managerial economics is concerned with economic theory and tools of analysis, which are directly related in the process of decision-making.