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Economic inquality essay
Economic inquality essay
Opportunity cost theory
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“There is no such thing as a free lunch.” When someone offers me free lunch, I now understand that the lunch may not cost me any money but that someone else produced the ingredients, transported them to the store, and paid for them. Economics is the study of how goods and services are produced, distributed and utilized. In The Wealth of Nations, Adam Smith wrote that the sole motivator of man is self-interest. My self-interest is active when I buy shoes, develop my talents, and participate in our economy.
Last week I bought a pair of shoes at the Short Hills Mall. The production, distribution, and sale of shoes are a prime example of division of labor. Companies manufacture these shoes. These companies utilize the division of labor. In these companies, there is a specific job for a person or a group of people. The division of labor is defined as the separation of a work process into a number of tasks, with each task performed by a separate person or group of people. It is most often applied to systems of mass production and is one of the basic organizing principles of the assembly line. Splitting up work into simple, repetitive tasks eliminate unnecessary motion and limit the handling of different tools and parts. This is related to the example above; where the production, distribution, and sale of shoes are separate tasks in the separation of a work process. Another example of division of labor is: two people are assigned to wash the dishes. One person has their own task for themselves. One person washes the dishes while the other person dries them. As you can see, these two people have their own task that they were assigned to, just as companies. One last example of scarcity is: if we all grow our own wheat, and then al...
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...f alternatives of how to spend my Friday night: I can go to the movies, I can stay home and watch ‘The Big Bang Theory” on TV, or go out for hot chocolate with friends. If I choose to go to the movies, my opportunity cost of that action is what I would have chose if I had not gone to the movies - either watching the “The Big Bang Theory” or going out for hot chocolate with friends. As you can see, the concept of opportunity cost is a part of our every-day life.
Economics is related to everyone’s life. It is (as said before) the study of how goods and services are produced, distributed and utilized. We are making economic choices every single day in our every-day life; we just might not realize it. In this essay, I explained to you how these economic concepts, opportunity cost and scarcity, are related to our every-day life.
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Adam Smith wrote The Wealth of Nations as a guide why economics should be catered to benefit both the business as well as the consumer. While Smith stresses the importance of d...
Up until Adam Smith’s Wealth of Nations, this was the dominant economic belief. Smith’s work would challenge the dominant theory of the time and push towards a free market approach with its premise reliant on individual rights and laissez faire economics. The push and belief in free-markets was innovative due to its belief that all parties benefit from a voluntary exchange, much different than the mercantilist view that only one party is beneficiary of trade (Rothbard 1). A simplified example of this is that of buying a painting from a painter; the buyer benefits from the gratification of looking at the painting, while the painter is benefitted
Adam Smith believed that if everyone behaves selfishly we are doing what is best for the economy of our society. This is what is known as “enlightened selfishness.” “Enlightened selfishness” is one of the main elements of capitalism. Profit is the motive for production of goods and greed is a virtue. You can own private property, but to maintain that private property you need capital to invest. Investing in something is always a risk. The larger the risk, the larger the pay-off. In a capitalistic society, the government does what is known as laissez-faire. This means that the government does not interfere with the market. This is known as the “hidden hand.” The desired result of laissez-faire and “enlightened selfishness” is competition. Ideally, this competition will bring out the best product for the buyers, and those who produce the best will be rewarded.
...every man’s business to some one simple operation, and by making this operation the sole employment of his life” (Smith 13). Smith’s economic theory was based on how individuals’ self-interest benefits the economy rather than the artificial laws enforced by the government.
The division of labor is a process in which individuals take on specialized tasks. Over time, philosophers and economists have developed multiple views on this concept and its resulting consequences. Adam Smith claims that the division of labor leads to greater productivity due to an increase in skill and a decrease in required time. Karl Marx and Friedrich Engels argue that it destroys the individual, as well as their power and creativity. Émile Durkheim agrees with Smith while addressing the negatives of specialization. Durkheim also explores organic solidarity, which he says creates social unity. One may argue that the division of labor is detrimental to an individual’s personality, but it can be beneficial. One might say that the division
In pondering what I could write these economic stories about, I referred to text in the book “How to Think Like an Economist”, with in this book Mr. Arnold had a great revelation that caught my attention. That of the question “can there ever be too little of a bad thing?” (Arnold, 2005), this tidbit of information got me to think just in everyday life, is it possible to want what to monopolize happiness so much that the bad in life can destroy you. In reflecting upon various life situations and relationships I found that the influences of economic principles where everywhere and in order to monopolize life you have to notice the principles and theories.
Adam Smith states that “As every individual, therefore, endeavours as much as he can both to employ his capital in the support of industry and so to direct that industry that its produce may be of the greatest value: every individual necessarily [contributes to] the annual revenue of the society as great as he can.” This explains the “Invisible Hand” which stated that people act in their own self interest and buy themselves the best which makes them greedy.This statement explains us that by pursuing their own interest that they can increase the public
Martin argues this point, stating that, according to Adam Smith, while most likely unintentional, some merchants seek to please customers by benefiting the community in order to increase satisfaction and therefore gain sales (pg. 12) or the rich provide jobs for the poor who need them, thereby distributing wealth (pg. 15). While obviously not an exact science, individuals must consistently seek to moderate between the two sides to keep the marketplace free and energized. David Landes (in Dawson, 2004) suggests that, historically, free enterprise is the most successful driver of wealth creation and, above that, it may also provide “all manner of social advantage within the company, community, and home country.” Dawson (2004) goes on to highlight these advantages include investments in community programs, impetus for social change, a tax base that can be used for public works, education funding, and support for democracy (e.g., freedom from totalitarian
The division of labor consists of the means of production and the relations of production (Marx, 1932. P. 87). Marx states that individuals are defined by their labor in their sense of self and their place in society. He described means of production, such as working on an assembly line, as being unskilled and repetitive (Marx, 1932. P. 87). During Marx’s time, he claimed the rise of machinery caused workers to become mere extensions of the machines and this type of labor created a sense of alienation from the individual and their position in society. Importance in the production of goods switched from the laborer to the machine, because the machine became the main creators of products instead of the individual. At this point, the person became irrelevant and disposable in the production of goods(Marx, 1932. P. 92). This change in the means production altered the division of labor creating social change in every aspect of the super structure. According to Marx, capitalism is set up so that the fewer amount of benefits given to an employee results in the business owner increasing their surplus value (Marx, 1932. P. 88). This results in poor working conditions for the working class and the exploitation of the workers’ rights (Marx, 1932. P. 86). This commodification of labor becomes problematic to the working class who end up becoming dehumanized and their well-being is
Adam Smith believed that a nation's wealth was not derived by how much they had in resources, or in an exchangeable commodity, but rather by the labor that its residents produce. "The annual labor of every nation is the fund which originally supplies it with all the necessaries and conveniences which it annually consumes." (Wealth of Nations, p. 1) He stated that a nation could increase the efficiency of the potential of its people by increasing these two aspects of the work force: (a) Skill, dexterity, and judgement with which labor is applied, and (b) Proportion of those employed in useful labor to those not so employed.
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.
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.
Self-interest is the position that companies or individuals have to seek maximum profit or gain. The market uses this desire to self-benefiting to offer new services and products and to cause the voluntary exchange of goods and services . the value of these services is determined by market
In today's world, economics associated disciplines are of fundamental significance and application and this has encouraged me to pursue a degree in Economics. Economics has an important relevance in all of our lives. As consumers we try to make the best of our limited incomes. As workers we take our place in the job market. As citizens of a country our lives are affected by the decisions of our government: decisions over taxes, decisions over spending on health and education, decisions on interest rates, decisions that affect unemployment, inflation and growth. As dwellers on the planet Earth we are affected by the economic decisions of each other: the air we breathe, the water we drink and the environment we leave for future generations are all affected by the economic decisions taken by the human race. It is these stimulating issues that excite me about economics. I enjoy studying Economics enormously and believe my passionate interest in economics is continually strengthened by my regular reading of 'The Economist'
Economics is a social science which deals with the goods and services and their overall life cycle. There is a direct impact that this has on the overall working and the everyday lives of individuals. For instance the overall needs and desires of individuals is covered by the innovation and finance. These are used as a means to effectively provide the needed products and services to the public. Hence it is important to note that economics has a direct impact on the overall lives of individuals and there is a need to understand these in order to be able to run businesses more successfully.