Economics Assignment -1- Human Action
Describe 1000 words Nature of economics, praxeology and the general theory of human action, consider the use of thought experiments, the theory of value and time factor. Economics is the study of human action and how to manage the limited resources to fulfill unlimited wants of humans. It is also social science that analyses the choice for sharing limited resources. In economy, there are goods and services, production, consumption and so on. In real life, humans have many unlimited wants. Humans use goods and services to fulfill their unlimited wants. Using goods and services to fulfill unlimited wants is called consumption. Production and consumption are two …show more content…
So the value of what they produce in terms of the conditions under which it can be exchanged for the things they consume will determine the level of their material life. A theory of value should term the factors that determine the income distribution. Value is a fundamental belief or practice about what is desirable, worthwhile, and important to an individual. Humans do value some things more highly than others, and that their actions are the manifestation of those values. The notion that humans always choose what they prefer may seem too extreme. For example, water is so much more valuable than diamonds, but people pay so much for diamonds and so little, perhaps even nothing, for water. So, humans’ valuation depends on their situations. Whenever humans choose something, they must abandon another. It is called choice of opportunity cost. Choices involve considering the means necessary to achieve their ends. Choosing determines all human decisions. The economics problem or choosing problem of a country, otherwise opportunity cost are expressed with production possibility curve. Production possibility curve also shows the three main factors of economics which are scarcity of resources, opportunity cost and increasing opportunity cost. The disastrous labor theory of value, which attempted to equate value with the amount of labor that had gone into a good, was developed in an attempt to patch over this deficiency. Utility …show more content…
The law of marginal utility applies to savings as well as to consumption. Humans began saving to produce higher-order goods. Saving is important because it can improve economic structure and is able to consume in future more than now. So, humans worked hard so that they could save for future consumption. Saving is the road to wealth and can be defined as the decision to guide actions toward satisfactions more distant in time, even though more immediate satisfactions are known to be available. Saving is to recognize that the image of future dissatisfaction is itself a source of present unease. Investment is the activities which are increasing new investment, replacement for depreciation of production resources that becomes continual production and investment addition. Capital refers to anything which is produced by man and which is used for further production. It also means man-made resources are used for further production. Complementary goods are products or services that consumers use together. For example, hammer and nails, a lamp and a light bulb. The value of a capital good is related to its position in the capital
Describe 1000 words Nature of economics, praxeology and the general theory of human action, consider the use of thought experiments, the theory of value and time factor. Economics is the study of human action and how to manage the limited resources to fulfill unlimited wants of humans. It is also social science that analyses the choice for sharing limited resources. In economy, there are goods and services, production, consumption and so on. In real life, humans have many unlimited wants. Humans use goods and services to fulfill their unlimited wants. Using goods and services to fulfill unlimited wants is called consumption. Production and consumption are two …show more content…
So the value of what they produce in terms of the conditions under which it can be exchanged for the things they consume will determine the level of their material life. A theory of value should term the factors that determine the income distribution. Value is a fundamental belief or practice about what is desirable, worthwhile, and important to an individual. Humans do value some things more highly than others, and that their actions are the manifestation of those values. The notion that humans always choose what they prefer may seem too extreme. For example, water is so much more valuable than diamonds, but people pay so much for diamonds and so little, perhaps even nothing, for water. So, humans’ valuation depends on their situations. Whenever humans choose something, they must abandon another. It is called choice of opportunity cost. Choices involve considering the means necessary to achieve their ends. Choosing determines all human decisions. The economics problem or choosing problem of a country, otherwise opportunity cost are expressed with production possibility curve. Production possibility curve also shows the three main factors of economics which are scarcity of resources, opportunity cost and increasing opportunity cost. The disastrous labor theory of value, which attempted to equate value with the amount of labor that had gone into a good, was developed in an attempt to patch over this deficiency. Utility …show more content…
The law of marginal utility applies to savings as well as to consumption. Humans began saving to produce higher-order goods. Saving is important because it can improve economic structure and is able to consume in future more than now. So, humans worked hard so that they could save for future consumption. Saving is the road to wealth and can be defined as the decision to guide actions toward satisfactions more distant in time, even though more immediate satisfactions are known to be available. Saving is to recognize that the image of future dissatisfaction is itself a source of present unease. Investment is the activities which are increasing new investment, replacement for depreciation of production resources that becomes continual production and investment addition. Capital refers to anything which is produced by man and which is used for further production. It also means man-made resources are used for further production. Complementary goods are products or services that consumers use together. For example, hammer and nails, a lamp and a light bulb. The value of a capital good is related to its position in the capital