The Basic Principles Of Microeconomics

The maximin rule for making decisions, you should select the alternative under which the worst that could happen to you is better than the worst that could happen to you under any other alternative—that is, you should try to maximize the minimum that you will receive. My opinion on this is that if you are faced with making a decision, you should make the best decision that has the least amount of consequences. This is said to be one of the most widely used rules for making decisions.

The theory that we should only do the actions that bring about the best consequences is a consequentialist theory. Consequentialism is correct because if the action taken creates the most possible good, then that action must be the right action. Consequentialism leads to the right action because the right action is the

Refer to the above table. Suppose the government commands each firm to reduce its emissions by 1 ton each and allows these two firms to trade pollution permits. If a 1-ton credit is sold for $175, the total cost for both companies combined to reduce emissions by a total of 2 tons could be as low as:

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)

Economics is the social science that deals with the production, distribution, and consumption of goods and services and with the theory and management of economies or economic systems. All economists agree on one thing, the economy is large and it is unpredictable. However, throughout the years economists have developed some simple but widely applicable principles that are useful when trying to understand decisions that are made by everyday people to the workings of highly complex markets. There are Seven Core Principles of Economics. These principles are: Scarcity Principle, Cost-Benefit Principle, Principle of Unequal Costs, Principle of Comparative Advantage, Principle of Increasing Opportunity Cost, Equilibrium Principle, and

Small business are said to be the backbone of the United States economy. It said that small businesses contribute to growth and vitality in the specific area of the United States economic development. Small businesses play a huge role in how the business world is shaped. Entrepreneurs are smart, creative and innovative however, those same entrepreneurs need to have some knowledge that the study of microeconomics focuses on. With the study of microeconomics, their product or future business will succeed in an economic view point.

The three principles of utilitarianism are “1. All ‘pleasures’ or benefits are not equal, 2. The system presumes that one can predict the consequences of one’s actions, and 3. There is little concern for individual rights” (Pollock,

This leads into the fourth principle which is, "People Usually Respond Incentives, Exploiting Opportunities to Make Themselves better off," which is saying that people are looking to benefit themselves as much as they can. Although these two principles do not seem to lead into each other they do. If your current choice affects you now and you do not look into how it will benefit you later with future decisions you have not benefited from your choice as well as you could

Secondly, he proposed two versions of principles for the second premise. The favored principle is that “If it is in our power to prevent something bad from happening, without thereby sacrificing anything of comparable moral importance, we ought, morally, to do it.” From this principle he suggests that people should give a help to person if the situation after giving a help is not as bad as the situation that the person was. The guideline is quite obvious that we should help if the sacrifice is affordable and is not harmful to our life.

The second principle, which is beneficience, revolves around reducing the risks of harm. This means stopping a study if necessary, that results must outweight possible harmful outcomes, and inhumane treatment should never be acceptable. The last principle is justice. This refers to every participant receiving an equal opportunity of obtaining the benefits of the study and to not selecting a certain group for harmful research.

The first principle in individual decision-making is facing a trade-off. In order for individuals to accomplish their goals or to obtain something they desire, there is usually something that must be given up or traded to accomplish that. In Chapter 1 Principles of Economics, efficiency vs. equity is discussed which helps further explain this principle. Society is always desiring to

1. Economics – the efficient allocation of the scarce means of production toward the satisfaction of human needs and wants.

For an economy to thrive it must spend money. The amount of money that is spent can vary greatly from one year to the next. When interest rates are low and reasonable, more loans may be taken and this money is put back into the economy. This influx of monies into the economy can create jobs which lower the unemployment rate. A nation must be able to engage in free trade to help import goods and services that it may be lacking in. When a nation has goods and services that it excels with it can export them to other nations that are in need of them. This import and export cycle determines a nation’s trade balance.

In the United States, minimum wage has remained at a low number for several years. Minimum wage is defined as the lowest possible income that an employer can legally pay an employee. This ensures that all people are fairly paid and not defrauded by companies or businesses. Minimum wage is considered a price floor and the minimum wage laws determine the lowest price possible that any employer must pay for labor. In an economic model, the quantity of supplied is greater than the quantity demanded and the minimum wage is above equilibrium price and quantity. Minimum wage prevents labor supplied and labor demanded from moving

Microeconomics is the economic influences that impact at the micro, or firm, rather than macro level. The study of this subject is one that is highly valuable for any studying business with the provision of knowledge that will increase understanding of different influences and support the decision making processes. With the knowledge gained, along with the skills in applying that knowledge developed through class work and exercises for the different modules, there has also been the development of increased confidence, both personal and in the theories, in using the relevant concepts and tools in a practical setting.