Economic Concepts Worksheet
Economic Concepts Worksheet
Concept Application of Concept from Personal Experience Reference to Concept in Reading
Economic Perspective
Economic Perspective involves three elements
1. Scarcity and choice
2. Rational Behavior
3. Marginalism
Economic Perspective is the understanding of why people choose one want over another When I graduated with my under-graduate degree I had to make the choice to either move back to my hometown where my family and friends were or take employment in a different state. I chose to move back to my hometown because I figured I would have been able to find employment in my hometown. In retrospect, I had much more potential to make more money if I would have chosen to take the position the other state. …show more content…
“ Individuals look for and pursue opportunities to increase their utility – that is, pleasure, happiness, or satisfaction” (McConnell & Brue, 2004, p.2).
“Self-interest behavior is simply behavior that enables a person to achieve personal satisfaction, however it may be derived” (McConnell & Brue, 2004, p.3).
Marginal Analysis
Marginal Analysis involves comparing the extra benefits of a choice with that of the extra cost of that same choice
Recently, I had to choose between getting a new mobile device which could link to my Microsoft Outlook and had a full key pad for $300 or a device for $150 which did not have a full key pad or the ability to sync with my Outlook. I decided the extra cost of a device which would assist with work and school worth the benefit compared to the cheaper less advanced mobile device. “In a world of scarcity, the decision to obtain the marginal benefit associated with some specific option always includes the marginal cost of forgoing something else” (McConnell & Brue, 2004, p.3).
Economic Systems
There are two general types of economic systems: the market system and the command system.
Market System = Capitalism
Private ownership of resources and the use of markets and prices to coordinate economic activity (McConnell & Brue, 2004, p.20).
Command System = Socialism
Government owns most of the property resources and decision making is made though a central economic plan (McConnell & Brue, 2004, p.21).
My place of employment is an independent retailer for AT&T.
The owner of the company has the choice to set prices on product based upon his decision of what will be best to induce consumption of his product. I know another person who is also an independent retailer for AT&T and he sets his prices differently than that of my owner. The result is open competition by two individuals who are willing to produce these goods through their own decisions.
China is an example of a command system. The government of China owns most of the property resources and a central board makes the the vast majority of the decisions concerning the use of the government owned resources. For instance, the government of China owns the oil of the company thus they are able to allocate its production based upon its derectives. Economic System is, “a particular set of institutional arrangements and a coordinating mechanism – to respond to the economizing problem” (McConnell & Brue, 2004, p.20).
“Economic systems differ as to (1) who owns the factors of production and (2) the method used to coordinate and direct economic activity” (McConnell & Brue, 2004, p.20).
Law of Demand
Is the relationship between price and the amount of a product people want to …show more content…
buy
I work in the mobile phone and service industry as a sales agent. As a Sales Associate the demand of customers has a direct affect on the increase or decrease of my income. A few months ago one of the brands of phones reduced their prices by 50% for a month. During that time my income increased by over 20% because the demand of the customer increased. After the month of decreased prices was finished and the price of the product returned to original prices the demand of the consumer decreased. This decrease was relatively quick leaving extra product which was not needed. “All else equal as price falls, the quanity demanded rises, and the price rises, the quanity demanded falls” (McConnell & Brue, 2004, p.2).
Circular Flow Model
Involves two broad markets: the resource market and the product market, and the interrelationship between households and businesses within these markets.
Resource Market
Households sell resources and businesses buy them.
Product Market
Businesses produce and sell product and households buy the product from the income gained from selling their resources.
I have been part of the resource market for the past 18 years. During this time I have sold businesses my resources directly as a worker. My resources have been sold to factories, retail stores, city services, and restaurants. Through these 18 years I have sold my resources as a worker to different businesses based on the amount businesses are willing to pay for me as a resource.
As part of the product market I buy the product and services that are produced by businesses who buy and combine the resources households to offer. I buy these products through the income which given to me in return for my resources.
Within my place of employment, my resources are bought by the owner as a worker (Resource Market) and I in turn buy the products and service which are sold by the business. Circular Flow Model suggests “a complex, interrelated web of decision making and economic activity involving businesses and households” (McConnell & Brue, 2004,
p.25).
“Businesses buy resources and sell products. Households buy products and sell resources” (McConnell & Brue, 2004, p.25).
Referances
Brue, L. S., & McConnell, R. C., (2004). Economics: Principles, problems and policies, (16th ed.). The McGraw-Hill Companies, p.2&3.
Brue, L. S., & McConnell, R. C., (2004). Economics: Principles, problems and policies, (16th ed.). The McGraw-Hill Companies, p.20&25.
Brue, L. S., & McConnell, R. C., (2004). Economics: Principles, problems and policies, (16th ed.). The McGraw-Hill Companies, p.25.
Concept Application of Concept from Personal Experience Reference to Concept in Reading
Economic Perspective
Economic Perspective involves three elements
1. Scarcity and choice
2. Rational Behavior
3. Marginalism
Economic Perspective is the understanding of why people choose one want over another When I graduated with my under-graduate degree I had to make the choice to either move back to my hometown where my family and friends were or take employment in a different state. I chose to move back to my hometown because I figured I would have been able to find employment in my hometown. In retrospect, I had much more potential to make more money if I would have chosen to take the position the other state. …show more content…
“ Individuals look for and pursue opportunities to increase their utility – that is, pleasure, happiness, or satisfaction” (McConnell & Brue, 2004, p.2).
“Self-interest behavior is simply behavior that enables a person to achieve personal satisfaction, however it may be derived” (McConnell & Brue, 2004, p.3).
Marginal Analysis
Marginal Analysis involves comparing the extra benefits of a choice with that of the extra cost of that same choice
Recently, I had to choose between getting a new mobile device which could link to my Microsoft Outlook and had a full key pad for $300 or a device for $150 which did not have a full key pad or the ability to sync with my Outlook. I decided the extra cost of a device which would assist with work and school worth the benefit compared to the cheaper less advanced mobile device. “In a world of scarcity, the decision to obtain the marginal benefit associated with some specific option always includes the marginal cost of forgoing something else” (McConnell & Brue, 2004, p.3).
Economic Systems
There are two general types of economic systems: the market system and the command system.
Market System = Capitalism
Private ownership of resources and the use of markets and prices to coordinate economic activity (McConnell & Brue, 2004, p.20).
Command System = Socialism
Government owns most of the property resources and decision making is made though a central economic plan (McConnell & Brue, 2004, p.21).
My place of employment is an independent retailer for AT&T.
The owner of the company has the choice to set prices on product based upon his decision of what will be best to induce consumption of his product. I know another person who is also an independent retailer for AT&T and he sets his prices differently than that of my owner. The result is open competition by two individuals who are willing to produce these goods through their own decisions.
China is an example of a command system. The government of China owns most of the property resources and a central board makes the the vast majority of the decisions concerning the use of the government owned resources. For instance, the government of China owns the oil of the company thus they are able to allocate its production based upon its derectives. Economic System is, “a particular set of institutional arrangements and a coordinating mechanism – to respond to the economizing problem” (McConnell & Brue, 2004, p.20).
“Economic systems differ as to (1) who owns the factors of production and (2) the method used to coordinate and direct economic activity” (McConnell & Brue, 2004, p.20).
Law of Demand
Is the relationship between price and the amount of a product people want to …show more content…
buy
I work in the mobile phone and service industry as a sales agent. As a Sales Associate the demand of customers has a direct affect on the increase or decrease of my income. A few months ago one of the brands of phones reduced their prices by 50% for a month. During that time my income increased by over 20% because the demand of the customer increased. After the month of decreased prices was finished and the price of the product returned to original prices the demand of the consumer decreased. This decrease was relatively quick leaving extra product which was not needed. “All else equal as price falls, the quanity demanded rises, and the price rises, the quanity demanded falls” (McConnell & Brue, 2004, p.2).
Circular Flow Model
Involves two broad markets: the resource market and the product market, and the interrelationship between households and businesses within these markets.
Resource Market
Households sell resources and businesses buy them.
Product Market
Businesses produce and sell product and households buy the product from the income gained from selling their resources.
I have been part of the resource market for the past 18 years. During this time I have sold businesses my resources directly as a worker. My resources have been sold to factories, retail stores, city services, and restaurants. Through these 18 years I have sold my resources as a worker to different businesses based on the amount businesses are willing to pay for me as a resource.
As part of the product market I buy the product and services that are produced by businesses who buy and combine the resources households to offer. I buy these products through the income which given to me in return for my resources.
Within my place of employment, my resources are bought by the owner as a worker (Resource Market) and I in turn buy the products and service which are sold by the business. Circular Flow Model suggests “a complex, interrelated web of decision making and economic activity involving businesses and households” (McConnell & Brue, 2004,
p.25).
“Businesses buy resources and sell products. Households buy products and sell resources” (McConnell & Brue, 2004, p.25).
Referances
Brue, L. S., & McConnell, R. C., (2004). Economics: Principles, problems and policies, (16th ed.). The McGraw-Hill Companies, p.2&3.
Brue, L. S., & McConnell, R. C., (2004). Economics: Principles, problems and policies, (16th ed.). The McGraw-Hill Companies, p.20&25.
Brue, L. S., & McConnell, R. C., (2004). Economics: Principles, problems and policies, (16th ed.). The McGraw-Hill Companies, p.25.