Economic Essay

business economics Essay
Table of Contents 1.INTRODUCTION 2.MAIN BODY 2.1THE NATURE OF RESOURCE COST
STRUCTURE AND THE PRACTICAL SIGNIFICANCE OF DIFFERENT COSTS 2.2THE
FACTORS INFLUENCING OPTIMUM SIZE AND THE SIGNIFICANCE OF DEMAND AND
SUPPLY RELATIONSHIPS 2.3UNDERSTANDING OF THE RELEVANCE AND
LIMITATIONS OF ECONOMIC THEORY TO MANAGE DECISIONS 3.CONCLUSION
1.INTRODUCTION: From the economic perspective, there are a full range of wants from
individuals, firms and government but there is only a few number of resources or factors of
production such as land, labour, capital and enterprise. The raw material will come from land,
taking the example of oil, gas. The labour relates to the individuals able to work. The capital covers
machinery,...show more content...
Equipment, everything used to bring all the materials together, for example, cranes, welding sets,
computing time, mobile offices. It is also important to know how much money committed to spend
at any point in time. 2.1.1The microeconomics perspectives: This focuses on the market behaviour
of individual consumers and firms to help understand the decision making process of firms and
households. This is at a level of individual buyer and individual seller, meaning demand and
supply. How much to produce and how much to charge for it. The law of the demand is that the
demand decreases when the price increases and the demand increases when the price decreases.
Also more demand of a product results in an increase of the price the price of that product. (See
graph below). 2.1.2The macroeconomics perspectives, focuses on the big picture of the national
economy as a whole and provides a basic understanding of how things work in the business
environment. The macrocosmic policy goals will be achieved by the monetary policy and the fiscal
policy. The monetary policy is the management of the nation money supply, the decision of the
interest rate and the banking system to promote economic growth, lower unemployment and
inflation. 2.2The factors influencing optimum size and the significance of demand and supply
relationship: The demand and the supply are two main concepts of the economy. Demand is what
quantity of product or service
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Economic Growth Essay
Economic Growth Economic growth refers to the rate of increase in the total production of goods
and services within an economy. Economic growth increases the productivity capacity of an
economy, thereby allowing more wants to be satisfied. A growing economy increases employment
opportunities, stimulates business enterprise and innovation. A sustained economic growth is
fundamental to any nation wishing to raise its standard of living and provide a greater well being
for all. Gross domestic product (GDP) is the monetary value of all final goods and services produced
over a year. It is the total value of production within the economy. The total value of production is
the total value of the final goods or services less the cost of...show more content...
Real GDP is measured by the following formula; [(current year quantity) x (based year price)]. A
more reliable measure of economic growth is real GDP per capita; this measurement takes into
account both the total production of the nation and the total population. Real GDP per capita
measures the real income per head of the population.
This can be measured by the following formula; Per capita nominal GDP = Nominal GDP
/ Population, Per capita real GDP = Real GDP / Population. Seven factors determine economic
growth. Natural resources such as land, mineral deposits, waterways; climatic conditions provide an
essential foundation to economic growth. Combined with the other resources of capital, labor and
enterprises, natural resources can be developed and organized to increase the productive capacity if
the nation. Consequently the quality and size of the labor force is a major determinant of economic
growth. Education and vocational training are essential the growth potential of a nation. The
promotion of education and job training schemes increase the knowledge, skills and flexibility of the
workforce that contributes to potentially higher levels of productivity and efficiency. Whether from
natural increase or immigration population growth can cause a higher level of economic growth. An
increasing population requires increased public spending on housing, education and other social
needs while businesses expectations of

Economics Essay
Definition of Topic: Economics is the study of supply and demand. It defines the ways that human
beings allocate resources and how resources are distributed amongst a market. It allows you to see
trends in current market places and predict what may happen in the future. Many different subjects
were once regarded as a part of economics. Political science and even sociology were once
considered part of the field. These subjects still play a major role in understanding economics but are
also completely separate disciplines today. History: Since ancient times, humans have contemplated
basic economic problems. Many great minds have tried to master the subject. Aristotle and Plato were
probably the first to document such studies. Both...show more content...
For Marx, capitalism's fatal contradiction was between improving technological efficiency and the
lack of purchasing power to buy what was produced in ever larger quantities. John Maynard Keynes
was a student of Alfred Marshall and an exponent of neoclassical economics until the 1930s. The
Great Depression bewildered economists and politicians alike. The economists continued to hold,
against mounting evidence to the contrary, that time and nature would restore prosperity if
government refrained from manipulating the economy. Unfortunately, approved remedies simply did
not work. In the U.S., Franklin D. Roosevelt's 1932 landslide presidential victory over Herbert
Hoover attested to the political bankruptcy of laissez–faire policies. New explanations and fresh
policies were urgently required; this was precisely what Keynes supplied. In his enduring work The
General Theory of Employment, Interest, and Money, the central message translates into two
powerful propositions. Existing explanations of unemployment he declared to be nonsense: Neither
high prices nor high wages could explain persistent depression and mass unemployment. Instead, he
proposed an alternative explanation of these phenomena focused on what he termed aggregate
demand–that is, the total

What is Economics? Essay
Many people think that economics is about money. Well, to some extent this is true. Economics has
a lot to do with money: with how much money people are paid; how much they spend: what it costs
to buy various items; how much money firms earn; how much money there is in total in the
economy. But despite the large number of areas in which our lives are concerned with money,
economics is more than just the study of money.
It is concerned with:
В·The production of goods and services: how much the economy produces; what particular
combination of goods and services; how much each firm produces; what techniques of production
they use; how many people they employ.
В·The consumption of goods and services: how much the population as a...show more content...
There are three types of resources:
В·Human resources: labour The labour force is limited both in number and in skills.
В·Natural resources: land and raw materials The world's land area is limited, as are its raw materials.
В·Manufactures resources: capital
All inputs into production that have themselves been produced: e.g. factories, machines and tools.
One must bear in mind that our wants are virtually unlimited, while the resources available to
satisfy these wants are limited. In other words when society demands more of a product than can
actually be produced to fulfil those wants we have a problem of scarcity. An example of this would
be the OPEC oil price shocks between 1973 and 1980. Yes, it is true that the price of oil rose and
some individuals used substitutes but the economies of oil importing countries like Germany and
Japan fell because OPEC now had more buying power since they had the control over a scarce
resource. We can therefore think of oil as having become scarcer in economic terms when its price
rose.
Earlier I stated that economics is concerned with consumption and production. We can look at it in
the terms of demand and supply. It is simply the quantity of a good buyers wish to purchase at each
conceivable price. Three factors determine demand:
В·Desire
В·Willingness to pay

В·Ability to pay
Whilst supply is the quantity of good sellers wish to sell at each conceivable price. Supply is

Economic Systems Essay
Introduction
Economic systems are organized way in which a state or nation allocates its resources and
apportions goods and services in the national community. An economic system is slackly defined as
country's plan for its services, goods produced, and the exact way in which its economic plan is
carried out. There are three types of economic systems exist, they are command economy, market
economy, and mixed economy. Command economy is also sometimes calledplanned economy. The
expectations of this type of economy is that all major decisions that related to the construction or
production, distribution, commodity and service prices are all made by the government. However,
in market economy, national and state governments play a...show more content...
Businesses can decide which goods to produce and in what quantity and consumers can decide
what they want to purchase and at what price. The role of the state is limited to ensure right
precision in the prices charged by the sellers. Prices also have the function to allocate and
distribute a country's resources. Market leads to complete effectiveness bringing about the best
possible distribution of a country's resources in a perfect world. This would only happen in a
state of equilibrium and there is a unique price for every commodity. But in a realistic world
which is imperfect by nature, prices are never at equilibrium and very unstable depending upon
the vagaries of the market forces. This generally harms people living below the poverty line. It is
impossible for them to pay high prices in cases of demand shortage. Thus, the free market model
is not a viable option in developing countries which has a large number of poor. Besides, producers
are aim to minimize profit and maximize rent of production. Examples of countries that are using
this economy system are Hong Kong, USA, and UK. Many developing countries like India and
China are moving towards totally free–market economy. The command economy is government
directed. The market forces have very little say in such an economy. There is no private property.
On the other hand, a command economy aims at using all available resources for developing either

Inflation and the Economy Essay
Inflation and the Economy WHY UNDER MONETARY FREEDOM INFLATION COULD BE
STOPPED WITHOUT BRINGING ABOUT UNEMPLOYMENT
1. Unemployment and inflation do coexist and inflation causes much unemployment which would
cease with it.
2. Excessively inflated prices would fall to market prices and so promote sales and employment.
3. Less government spending would mean more private spending. 4. Prices and wages could be
adjusted fast. If this is not done then this is not the effect of stopping inflation!
5. Price adjustments through gold–value clearing could take place already during a continuing paper
money inflation – leaving no adjustment problem.
6. While FALLING prices do indeed deter from buying and promote...show more content...
2. Paying men not to work (unemployment "insurance").
3. Deflationary withdrawal of notes from circulation – while free banking remains suppressed.
4. Replacing the old currency at an arbitrary rate, not the free market rate, and most likely supplying
not enough new currency because under monetary despotism there is no yardstick like the free
market rate for currencies.
5. Continuing monetary despotism with all its uncertainties and the expectation of further inflation.
6. Tax increases and their stricter collection– with their deflationary effects. 7. Delays in spending of
tax–collected funds after the official currency
"reform".
8. Issuance of a new "reformed" currency in quotas only.
9. Insistence on gold payments or gold redemption – regardless of the availability of gold and
existing or possible alternative private contractual arrangements, i.e.: part redemption (revival J.Z.,
1999) of monetary despotism in the form of an exclusive gold standard.
10.Issuance of the new currency only to the extent that foreign loans are available as "backing".
I have no doubt that there are more right ways and that many more mistakes could be listed. This
listing was only made to throw some doubts on unchecked premises, official announcements and
"expert" views on the subject, including

e.g. those of Milton Friedman, F.A. Hayek, Murray Rothbard and Mark Tier.
The essence of my case is contained in the above

economic Essay
Globalisation – Economic Growth and Development and development indicators.
"Outline the differences between economic growth and economic development. Discuss how
economic development may be measured. Outline how globalisation may impact upon a nation's
development. Where appropriate make reference to a relevant case study."
Although economic growth and development are similar in meaning, they have some essential
differences. Economic growth refers to the increasing ability of a nation to produce more goods and
services. Economic development basically implies that individuals of that nation will be better off
and takes into account changes in economic and social structures that will reduce or eliminate
poverty. Economic development...show more content...
Various indicators have been developed to compensate for the limitations of economic growth
measurements. Rather than just measuring the economic living standards in a country, development
indicators measure the welfare of individuals in that country. The main development indicator used
is the Human Development Index (HDI). It was devised by the United Nations Development
Program (UNDP) to measure the economic achievements of a nation in combining economic growth
as well as social welfare. The HDI takes into account three major factors:
Life expectancy at birth: High levels of longevity are critical for a country's economic and social
well being.
Levels of educational attainment: The HDI measures adult literacy and the ratio of people in
primary, secondary and tertiary education.
Gross Domestic Product per capita: seen as being a measurement of the ability of people to access
goods and services.
The HDI is essentially a score between 0 and 1. A score of 0 would mean no human development
has taken place and a score of 1 is the maximum amount of human development. In 2000, the
Human Development Report places Canada as the top ranked nation with a HDI of 0.935.
Australia was ranked fourth, with a HDI of 0.929 behind Norway and the United States. The lowest
ranked nation was Sierra Leone with a HDI of 0.252. When comparing the HDI of certain countries,
the GNP per capita should also be considered. A nation with a much higher–ranking HDI than GNP
per

Free Market Economy Essay
A free market is a type of market that the government is not involved in. Since the government does
not care about what happens, the free market is also called "hands–off" or "let it be economics". The
government is limited to protect the citizens from the danger and that is the major goal for the
government. In the free market economy, there are three components of the free market economy:
competition, active but limited government, and the self–interest. Competition is one of the main
components of the free market economy. Competition means that the companies compete with one
another to make more benefits to themselves. According to the concept of the free market economy,
the competition means a good thing because it is a basic...show more content...
The government does not necessarily need to intervene how the marker goes. Therefore, the
competition is a significant factor of the free marker economy.Active but limited government is
another main part of the free market economy. This means that the government undertakes a
significant, active role in the market, but at the same time the government's role is ver limited
because all the investments and decisions in the economy are controlled by the market than by the
government. An invisible hand will control the market. Limited government is a type of government
in which there is a minimum intervention in personal properties. Overall, the government tries to
keep the economy in a law and let it free by limiting itself. Hence, the limited government is an
essential factor of the free market economy.Last, self–interest is a significant part of the free market
economy. Self–interest refers to one's desire to buy something. The market will be generally
controlled by people's interest; the companies will compete with one another to fit the best taste.
This is because the people's interest will be the main trend in the market and it will control what
should be made in the market. Consequently, the market will be self–regulated according to the
theory of a free market. Therefore, the self–interest is another significant factor of the free market
economy.Therefore, the competition, the

Economics Elasticity Essay
Businesses know that they face demand curves, but rarely do they know what these curves look
like. Yet sometimes a business needs to have a good idea of what part of a demand curve looks like
if it is to make good decisions. If Rick's Pizza raises its prices by ten percent, what will happen to
its revenues? The answer depends on how consumers will respond. Will they cut back purchases a
little or a lot? This question of how responsive consumers are to price changes involves the
economic concept of elasticity.
Elasticity is a measure of responsiveness. Two words are important here. The word "measure" means
that elasticity results are reported as numbers, or elasticity coefficients. The word "responsiveness"
means that there is...show more content...
When it is greater than one, economists say that demand is elastic.
Products which have few good substitutes generally have a lower elasticity of demand than products
with many substitutes. As a result, more broadly–defined products have a lower elasticity than
narrowly defined products. The price elasticity of demand for meat will be lower than the price
elasticity of pork, and the price elasticity for soft drinks will be less elastic than the price elasticity
for colas, which in turn will be less elastic than the price elasticity for
Pepsi.
Time plays an important role in determining both consumer and producer responsiveness for many
items. The longer people have to make adjustments, the more adjustments they will make. When
the price of gasoline rose rapidly in the late 1970s as a result of the OPEC cartel, the only
adjustment consumers could initially make was to drive less. With time they could also move
closer to work or find jobs closer to home, and switch to more fuel–efficient cars.
The concept of elasticity can help explain some situations that at first glance may seem puzzling.
If American farmers all have excellent harvests, they may have a very poor year financially. They
may be better off if they all have mediocre harvests. If a bus company decides it needs more
revenue and tries to get it by raising fares, its revenues may decrease rather than increase.
Inelastic Demand

Macroeconomics Essay
"Macroeconomics is a branch of economics that deals with the performance, structure, and behavior
of a national economy as a whole. Macroeconomists seek to understand the determinants of
aggregate trends in an economy with particular focus on national income, unemployment, inflation,
investment, and international trade" (Wikipedia, 2007). Government tends to use a combination of
both monetary and fiscal options when setting policies that deal with the Macroeconomic.
According to McConnell & Brue (2004), governments make adjustments through policy changes
which they...show more content...
dollars into gold at $35 per ounce, has made the U.S. and other countries' monies into fiat
money–money that national monetary authorities have the power to issue without legal constraints.
Money is used in all economic operations; money has a powerful effect every economic activity. The
increase in supply of money put more money in the hands of the consumers and increased spending.
When the money supply continues to expand and the prices begin to increase, particularly if the
output growth reach to the capacity limits as the public begin to expect the inflation, lenders insist on
higher interest rates to offset and expected decline in purchasing power over the life of their loans.
Contradictory results happen when the supply of money falls, or when the rate of growth cries off.
The U.S. money supply comprises currency–dollar bills and coins issued by the Federal Reserve
System and the Treasury–and various kinds of deposits held by the public at commercial banks and
other depository institutions such as savings and loans and credit unions. On June 30, 1990, the
money supply, measured as the sum of currency and checking account deposits, totaled $809 billion.
Including some types of savings deposits, the money supply totaled $3,272 billion. And even broader
measure totaled $4,066 billion

The Global Economy Essay
The global economy is a complex and multi–faceted system. When one variable changes, such as a
dramatic increase in the New Zealand dollar, the spin–off effects can be detrimental to some while
increasing the wealth and living–standard of others. This essay will discuss the global economic
system we have in place today, and the consequential distributive injustices as a result of this
structure. These perceived injustices arise as a result of the ethical debate of reducing poverty via
economic growth versus creating a sustainable environment.
The origin of the capitalist economy we have today can be linked back to the industrial revolution
between the 1750s–1850s. As the economy began to display signs of rapid growth, global population
...show more content...
The idea of the capitalist market is in contrast with that of the socialist market. The aforementioned is
characterised by private business ownership, free entry into the market, profit as the ultimate goal,
consumer choice and the government acting as a type of economic regulator. A socialist market is
more typical of a government–planned economy where distribution of income and wealth is the key
to obtaining social gain. The Washington Consensus is a set of policy based themes its author, John
Williamson, believed necessary for the recovery of Latin America after the financial crisis of the
80s. Williamson provides a set of capitalist ideas which the IMF, World Bank and US Treasury
Department use when setting policies (Williamson, 2002). The Washington Consensus is proof that,
for the most part, the economy is still in a capitalist form. However, recently there has been a huge
push by socialist economies such as China and Russia as they become increasingly powerful in an
economic sense, although in a way they are also becoming increasingly westernised. The problem is
evenly distributing the world's resources when increasing amounts of people want more than they
actually need. Socialist state economic systems but with Americanised consumerism is setting the
scene for an interesting start to the 21st century.
The changing economic landscape comes at the heels of an ever–expanding and expending Chinese
economy – an

Economic Equality
Economic Inequality
The growing economic inequality in the United States is an ongoing issue and over the years has
changed. According to past studies done by the US Census Bureau changes in earnings
distributions have had a huge effect on this inequality. Just take a look at some of the people in the
fields where you work or maybe family members work and the income inequality is very evident for
many different reasons. With help of studies done by professionals and my own experiences we will
pinpoint some of the ongoing issues of the reasons behind this inequality.
"Structural changes in the economy which translates into differences in wage premiums paid to
workers with certain skills." Barry Bluestone paragraph 5. This research shows...show more content...
When you have someone who is income wise a lot better off than someone who makes half of
that then of course they will have more access too better resources and different way of managing
what they have. I also think that even if you do not have many resources available to you because
of the income inequality, you as a person have the opportunity to make the best out of what you
do have and take small steps to rise up the ladder. There are many ways to go with such a vast
subject; I found it very difficult to choose the major ones. Even with all the articles and keeping it
within the studies, one has their own opinion of what caused income inequality, and me personally I
think there are many to blame for the inequality standards that all American people have, and
whether you are wealthy or not we are all equal.
Works Cited
Graham, Phillip and Steve McMillan. "The Real Causes of Income Inequality." Wall Street Journal
Online. 6 Apr. 2012. Web 28 Sept. 2012. <http://online.wsj.com/article>.
Gutman, Huck. "Economic Inequality." Common Dreams. July 2002. Web. 28 Sept. 2012. <http:/
/www.commondreams.org>.
Jones, Arthur F., Jr. And Daniel Weinberg "The Changing Shape of the Nation's Income Distribution:
Consumers Income." US Census Bureau. 60–204. June 2004. Web. 28 Sept. 2012. <http:/
/www.census.gov/hes/income/data>.
G. William Donhoff.

Economic Decision Making Essay example
Individuals make economic decision based on a variety of reasons. The rational is based on each
individual's need or desire for a commodity. People go through several decision–making processes
before making the final decision and are often not conscious of the process. Obviously, decision–
making covers a wide area, involving virtually the whole of human action. Often people are not
conscious of the process.
The four principles of individual decision– making suggest that people face trade off. People have to
give up a thing to acquire some other thing. This includes money, time, resources, and energy. The
cost of something is what a person is willing to give up to obtain it. Therefore, the need is to find an
alternative and then...show more content...
The decision is then based on whether the benefits exceed the cost. Incentives whether they are
positive or negative are a part of the decision–making process. Incentives are motivators that cause
change. The cost of tomatoes, for instance, the price of tomatoes rose to $2.79 per pound. The
effect was that people purchased fewer tomatoes and thus, people look for an alternative product or
just did not purchase them. As a result of this, the price of tomatoes increased even more because
people were purchasing fewer tomatoes. From the producers' side, the product was going to waste
and profits were declining. The marginal cost was affected, causing them, the producer to lower the
cost to obtain a higher marginal benefit. In using this example, two types of incentives could have
led to making a different decision.
1.Financial incentives such as a product coupon, a store discount, or a sale.
2.Moral incentives such as a special meal for a special occasion that called for the need to use
tomatoes in the favorite dish for a loved one. The principles of economics affect all aspects of life to
involving consumers, companies, and government's interaction with each other. It uses equations,
formulas, theories and details to analyze the decision– making process, and it generates awareness.
Trade can allow a person to concentrate in his or her area of expertise. When trading those goods or
services with others, a gateway to other products or

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Economic Essay