Economics And Opportunit Microeconomics
1. Scarcity: What are the wants and constraints of those involved?
2. Opportunity Cost: What are the trade-offs?
3. Incentives: How will others respond?
4. Efficiency: Why isn’t everyone already doing it?
Scarcity is defined as a person’s wants being greater than their available resources. People face scarcity everyday due to limited resources such as travel, limited income, and not enough time to do everything they want to do. Opportunity costs is one way to measure the cost of something. Determining the alternative ways to spend the same out of money in different ways based on your optimal utility. The profit of the next best alternative is the …show more content…
Typically in the markets where goods and services are bought and sold. There are two types of people I the market. Consumers and producers. Consumers usually choose to maximize their available preference in the market with limited income, resources, and time. Producers base their actions and decisions off of maximizing profits with little capital usage or loss. We then begin to see supply and demand in the market change due the wants and needs of consumers and producers. Supply and demand is an important concept for the market economy. Demand refers to the quantity of a product or service is demanded by buyers. The quantity demanded is the amount of product people are willing to buy at a certain price. Supply represents how much the market can offer. The quantity supplied is the amount of a particular good or service that producers are willing to supply at a certain price. Price is a reflection of supply &