- Economics deals with the problem of allocating scarce resources to meet needs in an efficient way. An economy answers four vestigial questions: (1) What to produce (2) How much to produce (3) How to produce and (4) For whom to produce.
- Micro: dialogue more or less scotchs in firms, households, etc.
- Macro: Talks about aggregates and how economics acts a hall.
- To obtain more of something, we must collapse something else = Trade off = the opportunity cost, which measures the cost associated with the best ersatz that we develop to give up to obtain what we want.
- Marginal changes = small, incremental adjustments to an action plan. Rationality implies that when making a decision, people liken the costs and the benefits associated with it and that they choose the alternative for which the fringy (additional) benefits exceed the marginal costs by the largest amount.
- Efficiency = Society gets the most that it quite a little from its scarce resources
- A market economy = an economy that allocates resources finished the decentralized decisions of many cias as they interact in markets for goods and operate and markets for factors of production.
= allows competitivity and specialization
Characteristics:
o It might have failures: Externalities (affect a third ships company and it doesn’t affect price) and market power (Group of consumers or producers have power to transform price)
o There are ii markets: the market for factors of production and the market for goods and services and two types of economic agents: households and firms
o There is another flow moving nearly: a flow of Money. On one side (firms pays…) wages, interest, lolly and the other side (households) spent on goods and services make by the firms.
- The Production Possibilities Frontier (PPF) shows the combinations of output that the economy chiffonier produce, given its endowments of...If you want to get a full essay, roll it on our website: Ordercustompaper.com
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