Economics : Basic Economic Concepts Essay

In terms of oil dependence, most of the general public believes that the world has enough oil to support us for the next hundred years; in truth we are rapidly depleting our petroleum sources due to the increasing population and demand. In fact, as was initially theorized by the Hubbert Peak Theory in 1950, Earth peaked in oil supplies in 1973 and the largest oil resources that have been discovered since then have been in Venezuela and Saudi Arabia. Here it must be

Imagine that you have decided to open a small ice cream stand on campus called "Ice-Campusades." You are very excited because you love ice cream (delicious!) and this is a fun way for you to apply your business and economics skills! Here is the first month's scenario--you order the same number (and the same variety) of ice creams each day from the ice cream suppliers, and your ice creams are always marked at $1.50 each. However, you notice that there are days when ice creams remain unsold but other days when there are not enough ice creams for the number of customers.

Using the data and your own economic knowledge, assess the case for financing universities mainly through charging fees to their students.

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

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)

At first this miscellany is very attractive to the buyer but when the process of decision making begins, the real problem erupts. If she is not certain about what she wants to purchase, she will keep shuffling between packets and shelves to make a choice. Seeing the variety she may want to make the best possible choice out of the available options and she must make a choice in order to avoid being frozen in endless doubt. Thus the modern super market offers numerous more choices, ironically much less satisfaction. Due to this it has been observed that consumers tend to return to the products they normally buy, not paying attention to 75% of the other products which are also a good competition for price and quality (Schwartz, 2005:12).

What is the effect on the equilibrium price and equilibrium quantity of orange juice if the price of apple juice decreases and the wage rate paid to orange grove workers increases?

6. If you have a private-ownership right to something, what does this mean? Does private ownership give you the right to do anything you want with the things that you own? Explain. How does private ownership influence the incentive of individuals to (a) take care of things, (b) conserve resources for the future, and (c) develop and modify things in ways that are beneficial to others? Explain.

ing that a few decades onwards, there is the possibility of oil becoming a secondary energy source,

In this way, the Fed manages price inflation in the economy. So bonds affect the U.S. economy by determining interest rates. This affects the amount of liquidity. This determines how easy or difficult it is to buy things on credit, take out loans for cars, houses or education, and expand businesses. In other words, bonds affect everything in the economy. Treasury bonds impact the economy by providing extra spending money for the government and consumers. This is because Treasury bonds are essentially a loan to the government that is usually purchased by domestic consumers. However, for a variety of reasons, foreign governments have been purchasing a larger percentage of Treasury bonds, in effect providing the U.S. government with a loan. This allows the government to spend more, which stimulates the economy. Treasury bonds also help the consumer. When there is a great demand for bonds, it lowers the interest rate.

1) According to the Law of Demand, the demand curve for a good will A) shift leftward when the price of the good increases. B) shift rightward when the price of the good increases. C) slope downward. D) slope upward. Answer: C 2) An increase in the price of pork will lead to A) a movement up along the demand curve. B) a movement down along the demand curve. C) a rightward shift of the demand curve. D) a leftward shift of the demand curve. Answer: A 3) An increase in consumer incomes will lead to A) a rightward shift of the demand curve for plasma TVs. B) a movement upward along the demand curve for plasma TVs. C) a rightward shift of the supply curve for plasma TVs. D) no change of the demand curve for plasma TVs. Answer:

3. Season high/low volume business – frozen desserts gain more popularity during the months of June through September, with a decline throughout the remainder of the year. We will need to explore potential alternatives that will aid in maintain and/or increasing sales during low volume seasons.

Elasticity of demand represented as “Ed” is defined as a “measure of the response of a consumer to a change in price on the quantity demanded of a good” (McConnell, 2012). Determinants for elasticity of demand would include the substitutability of a good, proportion of a consumer 's income spent on a good, the nature of the necessity of a good and the time a purchase is under consideration by the consumer. Furthermore, elasticity of demand is calculated with this formula:

In today’s society fossil fuels are the primary source of energy for most of the industrialized world. Utilizing fossil fuels has been very important to the industrialization development throughout the world. Industrialization in many parts of the world, energy has been needed at a much higher density then before and fossil fuels have fulfilled that need. Coal, gas, and oil are the three major sources of fossil fuels in the world. Despite other means of energy such as wind power, hydroelectric power etc., fossil fuels are still the main source of energy across the continent. Fossils fuels are critical to the function of society. “Fossil fuels (oil, coal, and natural gas) are the dominant source of energy today and will be for decades to come.” (Everett, B. October).

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.