...first section of the chapter describes the three key features of the economic perspective. This perspective first recognizes that all choices involve costs and that these costs must be involved in an economic decision. The economic perspective also incorporates the view that to achieve a goal, people make decisions that reflect their purposeful self-interest. The third feature considers that people compare marginal benefits against marginal costs when making decisions and will choose the situation where the marginal benefit is greater than the marginal cost. You will develop a better understanding of these features as you read about the economic issues in this book. Economics relies heavily on the scientific method to develop theories and principles to explain the likely effects from human events and behavior. It involves gathering data, testing hypotheses, and developing theories and principles. In essence, economic theories and principles (and related terms such as laws and models) are generalizations about how the economic world works. Economists develop economic theories and principles at two levels. Microeconomics targets specific units in the economy. Studies at this level research such questions as how prices and output are determined for particular products and how consumers will react to price changes. Macroeconomics focuses on the whole economy, or large segments of it. Studies at this level investigate such issues as how to increase economic growth, control inflation...
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...CHAPTER 1—WHAT IS ECONOMICS? MULTIPLE CHOICE 1. The basic problem of economics arises when there are unlimited resources available to fulfill society's limited wants. a.|True| b.|False| ANS: B PTS: 1 NAT: Financial theories, analysis, reporting, and markets LOC: Scarcity, tradeoffs, and opportunity cost TOP: Economics | Scarcity and Choice 2. Economics is the study of choice under conditions of a.|demand| b.|supply| c.|scarcity| d.|opportunity| e.|abundance| ANS: C PTS: 1 DIF: 1 NAT: Financial theories, analysis, reporting, and markets LOC: Scarcity, tradeoffs, and opportunity cost TOP: Economics | Scarcity and Choice 3. The study of economics would be superfluous if _____ did not exist. a.|demand| b.|capital| c.|corporations| d.|profit| e.|scarcity| ANS: E PTS: 1 DIF: 2 NAT: Financial theories, analysis, reporting, and markets LOC: Scarcity, tradeoffs, and opportunity cost TOP: Economics | Scarcity and Choice 4. Which of the following disciplines is not a social science? a.|psychology| b.|mathematics| c.|economics| d.|political science| e.|sociology| ANS: B PTS: 1 DIF: 1 NAT: Financial theories, analysis, reporting, and markets LOC: The study of economics, and definitions of economics TOP: Economics | Scarcity and Choice 5. What does economics have in common with sociology? a.|Economics and sociology ask fundamentally the same questions.| b.|Economics and sociology use the same tools to analyze...
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...considerations before making any long term financial decision or any decision regarding the acquisition of capital. ABC Complete Kitchens Inc. will have a clearer picture as to how this can impact the operations of the new plant. ABC Complete Kitchens’ Inc. will examine two areas within economics, Macroeconomics’ and Microeconomics’ and some of their factors with a section on legal considerations. Macroeconomics The study of total effects of choices that individuals, businesses and governments make on the domestic and global economy . Macroeconomics is one of the most important elements of national policy and used as the foundation if any decision regarding taxation or monetary policy concerns. Decisions regarding the balance of payments and interest rates are related to the overall macroeconomics situation of the country. There are many factors used to described macroeconomics and here are a few; Gross Domestic Product, Unemployment Rates and Price Index. Gross Domestic Product (GDP) The GDP is the market value that recognizes the goods and services produced within a period of time, usually this is over a one year period. The GDP is used as an indicator within macroeconomics to show the country’s standard of living. If a country is showing increased improvement and growth in its GDP, that country would be considered as a sign on the economic well-being. The GDP can be determined in three ways, and in principle all three of these ways give the same result; production...
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...Academic Integrity guidelines for Kaplan Open Learning and the University Of Essex, and declare that this assignment conforms to all of the rules and regulations contained therein. Please note: the guidelines can be found in the Student Handbook (see section 6.4). Regular assignment one Introduction In this assignment, the explanation of the macroeconomic and microeconomic environment will be happen with the aid of examples. Once this has been completed, a critical analysis of how the economic environment in recent years has affected Hampshire fire and rescue service will be made. Main Body The Macroeconomic environment The Macroeconomic environment is an examination of the economy. The macroeconomic environment is an important one because the analysis compiled enables a business to investigate an economy and see what trends are occurring. For instance, if the economy has grown since the last analysis or shrunk. The difference between the increase and decrease of the economy is important because the retailer has no control over how the economy grows or shrinks. There are also certain influences which will affect the macroeconomics; these are economic indicators such as GDP, the unemployment rates and inflation rates. These economic indicators have a big significance on the economy. The unemployment rates will affect the economy as there are fewer people out of work and the economy can affect employees’ chance of keeping their careers. This is known as the countercyclic economic...
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...CHAPTER 1—WHAT IS ECONOMICS? MULTIPLE CHOICE 1. The basic problem of economics arises when there are unlimited resources available to fulfill society's limited wants. a.|True| b.|False| ANS: B PTS: 1 DIF: Difficulty: Easy NAT: BUSPROG: Analytic STA: DISC: Scarcity, tradeoffs, and opportunity cost TOP: Scarcity and Individual Choice KEY: Bloom's: Knowledge 2. Economics is the study of choice under conditions of a.|demand| b.|supply| c.|scarcity| d.|opportunity| e.|abundance| ANS: C PTS: 1 DIF: Difficulty: Easy NAT: BUSPROG: Analytic STA: DISC: Scarcity, tradeoffs, and opportunity cost TOP: Scarcity and Individual Choice KEY: Bloom's: Comprehension 3. The study of economics would be superfluous if __________ did not exist. a.|demand| b.|capital| c.|corporations| d.|profit| e.|scarcity| ANS: E PTS: 1 DIF: Difficulty: Moderate NAT: BUSPROG: Analytic STA: DISC: Scarcity, tradeoffs, and opportunity cost TOP: Scarcity and Individual Choice KEY: Bloom's: Comprehension 4. Which of the following disciplines is not a social science? a.|psychology| b.|mathematics| c.|economics| d.|political science| e.|sociology| ANS: B PTS: 1 DIF: Difficulty: Moderate NAT: BUSPROG: Analytic STA: DISC: The Study of economics, and definitions in economics TOP: Scarcity and Individual Choice KEY: Bloom's: Comprehension 5. What does economics have in common with sociology? a.|Economics and sociology ask fundamentally the same questions...
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...Microeconomics and the Laws of Supply and Demand Rose Essor DeSouza ECO/365 September 7, 2015 Lori Geddes Microeconomics and the Laws of Supply and Demand The Khan Academy video explained how demand and/or supply changes are affected when factors in the market change, and how these changes affects market equilibrium, which is the state where the supply in the market is equal to the demand in the market, price and equilibrium quantity. Because demand and supply in the market is interdependent and are constantly changing or shifting, they play a critical role in altering market equilibrium price points and quantity available. Demand shifts of more or less of a product results in a shift of both price and quantity. An increase in demand will shift price up and quantity to the right and a decrease in demand will shift price down and quantity to the left on the demand curve. Supply shifts of more or less of a product affects the equilibrium point by shifting the supply curve to the right, indicating that more availability of a product. This results in a lower price and a higher demand for a product. A shift in the supply curve to the left, indicating there is less availability of a product, which results in a higher price and a decrease in demand of a product. Supply and Demand Curves Microeconomics places emphasis on demand and supply in the marketplace, which normally determines the change of levels in price and factors of individual choices while macroeconomics...
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....Microeconomics Assignement 1 1. a. Define opportunity cost, and explain its importance in economics. (3 marks) Opportunity cost refers to what you must give up (trade off) to obtain some item. It represents the forgone opportunities. It is very important to all of us; it helps and guides our decisions in life. For every decision made, no matter the circumstances; work, school, business, life in general, we incurred a cost, the opportunity cost, what we must give up to obtain the chosen good. The opportunity cost of an item is the weight of another item from those that society have to trade off or give up in order to obtain it, that is the way that society allocates its scarce resources. ALSO, OPPORTUNITY COST IS VERY IMPORTANT FOR THE THEORY OF COMPARATIVE ADVANTAGE AND TRADE. -1 MARK. b. The province of British Columbia hosted the 2010 Olympic Games and invested millions of dollars in improvements to facilities for these events. How would one determine the opportunity cost of the 2010 Olympic Games? (4 marks) The opportunity cost for BC to host the games could be determine by evaluating and comparing what the province could do with the funds (tax payers money) and time that it will invest in the games against, the benefits that could bring to the to the province if BC against the benefits that that money and time will create if invested differently. In one hand the province could add all the benefits that the games will bring to the province; benefits such as increase...
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...------------------------------------------------- Chapter 1—Introducing the Economic Way of Thinking MULTIPLE CHOICE 1. When economists say scarcity, they mean: a. | there are only a limited number of consumers who would be interested in purchasing goods. | b. | the human desire for goods exceeds the available supply of time, goods and resources. | c. | most people in poorer countries do not have enough goods. | d. | goods are so expensive that only the rich can afford it. | ANS: B PTS: 1 DIF: Easy REF: Full: 3 | Mic: 3 TOP: Scarcity TYP: RE 2. When economists say goods are scarce, they mean: a. | consumers are too poor to afford the goods and services available. | b. | consumers are unwilling to buy goods unless they have very low prices. | c. | goods are generally freely available from nature in most countries. | d. | the desire for goods and services exceeds our ability to produce them with the limited resources available. | ANS: D PTS: 1 DIF: Medium REF: Full: 3 | Mic: 3 TOP: Scarcity TYP: SA 3. Scarcity is a problem: a. | measured by the amount of goods available. | b. | of the poor, but not the rich. | c. | because human wants are unlimited while resources are limited. | d. | only in industrialized economies. | ANS: C PTS: 1 DIF: Easy REF: Full: 3 | Mic: 3 TOP: Scarcity TYP: RE 4. Scarcity can be eliminated if: a. | people satisfy needs rather than wants. | ...
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...Assignment 1 Version A This assignment has a maximum total of 100 marks and is worth 10% of your total grade for this course. You should complete it after completing your course work for Units 1 through 5. Answer each question clearly and concisely. 1. a. Define opportunity cost, and explain its importance in economics. (3 marks) The opportunity cost of something is what you must give up of one thing, in order to get another. Opportunity cost is a key concept of economics, and is described as expressing the basic relationship between scarcity and choice. The notion of opportunity cost plays a crucial part in ensuring that scarce resources are used efficiently. b. The province of British Columbia hosted the 2010 Olympic Games and invested millions of dollars in improvements to facilities for these events. How would one determine the opportunity cost of the 2010 Olympic Games? In order to determine the opportunity cost of the 2010 Olympic Games, the province must consider what they could have done with the money (4 marks) if they had invested it elsewhere Also to be considered is the Event Benefits less the Event Costs. 2. Use the graph below to answer the questions that follow. (2 marks each) [pic] a. What type of curves are these? Do these curves show a positive or negative correlation between price and quantity? The curves in the above graph...
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...eleven thousand in 1984 to just over seven thousand in 2006. The average profitability of the largest banks grew to outstrip the profitability of the industry’s smallest banks; an outcome traceable to increased competition from bank and nonbank financial firms, new technology that reduced the advantage of banks having a local presence, and the development of services that could be offered over wider geographic areas (www.mheducation.com). A new type of financial-services holding company (FHC) was created in 1999 as a result of passage of the Gramm-Leach-Bliley (GLB) Act. Provided these entities hold strong capital positions and possess sound management, they are permitted to bring together under the same corporate umbrella, commercial banks, investment banks, insurance companies, and selected other affiliated companies that are “financial in nature” and “compatible” with banking (www.mheducation.com). The FHCs come closest to mirroring the organizational structures and service menus of leading European banks, such as Deutsche Bank AG of Frankfurt and HSBC Holdings based in London, by offering the broadest array of services of any financial-services provider (www.mheducation.com). With joint approval of the U.S. Treasury Department and the Federal Reserve Board the menu of services FHCs can offer may be expanded in the future. As the twenty-first century unfolded almost six hundred and fifty holding companies selling services in the United States, including both domestic and...
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...problems. Next, we examine the specific methods economists use to examine economic behavior and the economy, including distinguishing between macroeconomics and microeconomics. We then look at the economizing problem from both an individual and societal perspective. For the individual we develop the budget line, for society the production possibilities model. In our discussion of production possibilities, the concepts of opportunity costs and increasing opportunity costs, unemployment, growth, and present vs. future possibilities are all demonstrated. Finally, in the Last Word, some of the problems, limitations, and pitfalls that hinder sound economic reasoning are examined. The Appendix to Chapter 1 provides an important introduction to graphical analysis. While this will be review material for most students, for some this may be new. Instructors are strongly urged to confirm that their students understand this section before proceeding. The software supplement can provide effective remedial help for those students who are not familiar with graphical analysis, or just need a refresher. WHAT’S NEW There is a new learning objective for this chapter: Explain the individual’s economizing problem and how trade-offs, opportunity costs, and attainable combinations can be illustrated with budget lines. The definition of Macroeconomics has been broadened to reflect all of the issues in the field. The “Consider This” discussion in the Individual’s Economizing Problem section...
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...EcoNomIcs mIcroEcoNomIcs macroEcoNomIcs Course Description Effective Fall 2012 AP Course Descriptions are updated regularly. Please visit AP Central® (apcentral.collegeboard.org) to determine whether a more recent Course Description PDF is available. The College Board The College Board is a mission-driven not-for-profit organization that connects students to college success and opportunity. Founded in 1900, the College Board was created to expand access to higher education. Today, the membership association is made up of more than 5,900 of the world’s leading educational institutions and is dedicated to promoting excellence and equity in education. Each year, the College Board helps more than seven million students prepare for a successful transition to college through programs and services in college readiness and college success — including the SAT® and the Advanced Placement Program®. The organization also serves the education community through research and advocacy on behalf of students, educators, and schools. For further information, visit www.collegeboard.org. AP Equity and Access Policy The College Board strongly encourages educators to make equitable access a guiding principle for their AP programs by giving all willing and academically prepared students the opportunity to participate in AP. We encourage the elimination of barriers that restrict access to AP for students from ethnic, racial, and socioeconomic groups that have been traditionally underserved. Schools...
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...COURSE: ECO1203 ECONOMICS 1 (4 cr) ECO1207 MICROECONOMICS (4cr) PREREQUISITE(S): None COURSE DESCRIPTION: This course is designed to enhance the students’ understanding of basic microeconomic concepts and theories in order to equip them with the basic conceptual abilities and skills in economic problem solving. The theories will include the basic economic problem, supply and demand analysis, consumer behaviour, market structure, production and cost and market failure. LEARNING OBJECTIVES: The aims of this course are to enable students to: Apply basic theoretical microeconomic models as a framework for understanding the real world problems. Establish the ability to communicate ideas pertaining to the basic microeconomic concepts, theories and events effectively, both verbally and in writing. LEARNING OUTCOMES: Successful students will be able to: Explain the core economic problems such as the scarcities and choices. Explain how economic problems can be reduced by improving the use of available resources and by using the concept of opportunity cost. Explain how equilibrium prices and goods are determined by using demand and supply curves analysis. Explain the behavior of individual firms towards maximizing profits (minimizing costs) in a perfectly competitive or monopoly market in determining the optimal production of goods and services and optimal price level. Calculate the necessary production costs to determine the profit maximizing output for different...
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...and Method of Economics MULTIPLE CHOICE 1. What is economics most concerned with? a.|how to reduce inflation| b.|how to profit from trading in the stock market| c.|studying how we allocate scarce resources to satisfy unlimited wants| d.|government taxation and spending| ANS: C PTS: 1 DIF: Easy REF: p. 1 BLM: Knowledge 2. What is the central concern of economics? a.|how to regulate the supply of money| b.|how to reduce the wants of individuals, businesses, and government| c.|how to find more resources to satisfy everyone's wants| d.|how to make the best use of scarce resources to satisfy our unlimited wants| ANS: D PTS: 1 DIF: Easy REF: p. 1 BLM: Knowledge 3. Why is there scarcity? a.|because average costs may exceed average benefits| b.|because human wants are limited| c.|because theory dictates it| d.|because our unlimited wants exceed our limited resources| ANS: D PTS: 1 DIF: Easy REF: p. 1 BLM: Knowledge 4. Why does the problem of scarcity exist? a.|because resources are limited relative to wants| b.|because governments fail to intervene in the market place| c.|because resources are unlimited relative to wants| d.|because the world has many poor people| ANS: A PTS: 1 DIF: Easy REF: p. 1 BLM: Knowledge 5. What does scarcity result from? a.|government decision making| b.|positive economics| c.|wants that exceed the resources necessary to provide them| d.|inappropriate normative judgments| ANS: C PTS: 1 ...
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...Finance The study of money and how it is used. Finance considers the relationship of money to time and risk. One of the main subsets of finance is the study of credit and banking, as this involves money, time, and risk all together. Finance may deal with personal or corporate issues, such as how will an individual or company acquires the money needed to perform a certain act. Debt. A debt is an obligation to repay an amount you owe. Debt securities, such as bonds or commercial paper, are forms of debt that bind the issuer, such as a corporation, bank, or government, to repay the security holder. Debts are also known as liabilities. Bond. Bonds are debt securities issued by corporations and governments. Bonds are, in fact, loans that you and other investors make to the issuers in return for the promise of being paid interest, usually but not always at a fixed rate, over the loan term. The issuer also promises to repay the loan principal at maturity, on time and in full. Because most bonds pay interest on a regular basis, they are also described as fixed-income investments. While the term bond is used generically to describe all debt securities, bonds are specifically long-term investments, with maturities longer than ten years. Security 1. An instrument that, for a stock, shows ownership in a firm; for a bond, indicates a creditor relationship with a firm or with a federal, state, or local government; or signifies other rights to ownership. 2. Collateral used to guarantee repayment...
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