Basic Economic Concepts That Are Important For All Twenty First Citizens

1. The first chapter in the book is about the market and its inner workings. The book briefly explains the idea of supply and demand, in which the price of a certain good or service will reach the point where all the demand is equivalent to the supply. However, the value of something is not determined by its necessity, but its desire within society, as seen by the difference in cost between a diamond and life giving water. Markets operate as they do because people try to maximize the amount of utility for themselves. Nevertheless, a strict rationalism model cannot be used for predicting all the occurrences of a market because of the ever changing behavior of people; thus economists must take precautions against

The allure of precious metals and the shimmer of precious stones versus the blandness of the essential concepts of life: food, water and shelter, can be a difficult choice for some people. The hypothetical line between what is a need versus a want splits society tenfold, and is a major problem in world civilization today. The choices humans make on a daily basis determine the futures of thousands, so what are the choices in life that are driven by needs and wants? The choices that define needs and wants are greed, the desire to pursue wealth, and the desire to protect one’s self.

ANSWER KEY Chapter 1 Chapter 1–1 II.D. the accumulation of those economic products that are tangible, scarce, useful, and transferable 1. scarcity of resources, which results from society not III.A. the market having enough resources to produce all of the things people would like to have III.B. the markets in which productive resources are bought and sold 2. A need is a basic requirement for survival and III.C. in product markets IV.A. the amount of output produced by a given amount of inputs in a specific period of time

Chapter 1, the Lesson: One of the greatest fallacies associated with economics is that there is an abundance of economists selfish interests involved. Because are selfish nature men tend to see only the immediate effects of decisions. This is especially true when it comes to economics. Every group has it’s own interests and because of this certain policies that may benefit one group, may not benefit another group. Because of self-interest, groups will banter back and fourth persistently until a solution is reached. This is one of the first causes of

1. Describe two examples of important things that financial planning skills can help you do, and explain why these things are important to you personally. (4-6 sentences. 2.0 points)

Rather than want it altogether, some of them will be willing to give more than normal. A competition will begin among them immediately, and the market prices will rise more or less above the natural price, according as either greatness of the deficiency, or the wealth and wanton luxury of the competitors, happens to animate more or less the eagerness of the competition. Among competitors of the equal luxury and wealth, the same deficiency will generally occasion a more or less eager competition, according as the acquisition of the commodity happens to be of more or less importance to them. Hence the exorbitant price of the necessaries of life during the blockade of a town or in a

Today, more than ever, there is great debate over politics and which economic system works the best. How needs and wants should be allocated, and who should do the allocating, is one of the most highly debated topics in our current society. Be it communist dictators defending a command economy, free market conservatives defending a market economy, or European liberals defending socialism, everyone has an opinion. While all systems have flaws and merits, it must be decided which system is the best for all citizens. When looking at both the financial well being of all citizens, it is clear that market economies fall short on ensuring that the basic needs of all citizens are met. If one looks at liberty and individual freedom, it is evident

In America, many people are completely unaware of how much their daily lives are affected by the economy, and vice versa—how much they as individuals can affect the economy. The general public’s ignorance of economics is extremely counterproductive because many problems in this country could be solved if everyone had a basic understanding of economic principles. However, economics can be difficult to understand, and therefore, people tend to avoid the topic whenever possible. In an effort to overcome the confusing nature of economics, Miranda, a twenty-two year old who works in retail and attends college in an effort to achieve a bachelor’s degree in business, will be used as an example. Upon observing Miranda as she goes about her day, it will become clear that several economic principles are at work in her daily life. This application of economics to simple, everyday situations will make economic principles easier to understand.

Scarcity is an economic term for a very serious and real-life issue. Scarcity is the problem that results from people having relatively unlimited wants even though the world’s resources are relatively limited. Simply put, there are not enough worldly provisions to satisfy all human wants and needs. The term has many examples. One case is the gasoline shortage in the 1970’s. The resource, gas, was scarce and there was not enough for everyone to freely consume anymore. People had to cut back on driving and there were certain days and times that people were allowed to refuel. Another example is the current drought that The United States, specifically California, is experiencing. The natural resource, water, is very scarce and the population is

Scarcity shows us the basic economic problem, where humans have unlimited wants, yet there are only finite amount of resources. Therefore, there are not enough resources to fulfill these unlimited needs. One real world example of a scarce resource is coal. Coal is a resource used for fossil fuel and is a combustible rock. Coal is used for “electricity generation, steel production, cement manufacturing and as a liquid fuel”. As you can see there are many uses for coal, thus there will be companies needing as much coal as they can get, however there is only a finite amount for everyone, therefore it must be allocated correctly in order to satisfy those needing coal for self interest and their own objectives.

Scarcity: Scarcity is a problem everyone in the world faces, no matter how rich or how poor. There is simply not enough of everything (time, resources, etc.) to meet our unlimited wanted and needs. Part of economics is finding alternatives to certain resources or making best use of the limited resources. Wal-Mart employees felt the effects of scarcity, even though it is a multi-billion dollar company.

The basic economic problem refers to a situation where human wants are unlimited while human resources are finite; it is the economic problem of scarcity of resources. At any one particular time, the resources of the earth are capable of producing a limited number of goods and services, however, human wants exceed limited production possibilities and this gives rise to what is known as the economic problem of scarcity.

In economics a rational consumer is defined as the people who act in a rational way and make rational choices, namely spending their money wisely. Utility is a term used to measure the amount of pleasure a consumer gains from a good or service they choose to invest in, thus spending our money wisely, in economic terms is a method of maximizing our own utility. However in today’s world different societies and individuals have failed to distinguish the different between a want and a need, which has consequently made itself apparent through the fact that human beings are not rational. In order to be a rational consumer people must understand that a need is something that you need to survive, whereas a want isn’t a vital necessity needed to

imagine living in a world in which there are infinite amounts of goods and resources to satisfy every human desire. People will not find need to budget their limited incomes, businesses will not worry about the cost of labor, and governments will not have reason to tax its citizens, or give importance to environmental issues. People living in this society will be equal to one another and everything would be free, like water in the ocean and sand in the desert. All prices would be zero and society will not find need for markets or financial institutions. Unfortunately we do not live in a utopia of limitless possibilities; we live in a scarce world of unlimited wants. Given unlimited wants, we must make the best use of our limited resources, a science our ancestors have developed and named economics. This study measures how societies use scarce resources to produce valuable commodities and distribute them efficiently among different people.

Scarcity is the condition in which human needs are everlastingly more noteworthy than the accessible supply of time, products, and assets.