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Applied Economics Assignment

This document contains notes on economics concepts including: 1. Scarce resources are goods and services that are in limited supply due to society demanding more than is available. 2. The four factors of production are land, labor, capital, and entrepreneurship. 3. Opportunity cost refers to the next best alternative given up when choosing one item over another. For example, giving up an afternoon nap to finish assignments.

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Grace Cabiles - Lacatan
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39 views

Applied Economics Assignment

This document contains notes on economics concepts including: 1. Scarce resources are goods and services that are in limited supply due to society demanding more than is available. 2. The four factors of production are land, labor, capital, and entrepreneurship. 3. Opportunity cost refers to the next best alternative given up when choosing one item over another. For example, giving up an afternoon nap to finish assignments.

Uploaded by

Grace Cabiles - Lacatan
Copyright
© © All Rights Reserved
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Name: Elyssa Lacatan Strand: HUMMS

Subject: Applied Economics Date: 09/06/2020

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2. Scarce resources are limited goods such as food, and services offered by barbers,
doctors, and police officers that are deemed scarce due to the tendency of society to
demand more resources and goods than what are available.

3. The four factors of production are land, labor, capital, and entrepreneurship. Land as
a factor can take on various forms; from agricultural land, commercial real estate and to
the resources that are available from a given piece of property. Labor as a factor refers
to the effort any person puts onto selling goods and services. Capital as a factor does
not only refer to monetary value- capitals are assets such as tools or equipment that
allows a person to be able to work productively. Last but not the least,
entrepreneurship as a factor is a skill that combines all the other factors in the correct
proportion and mobilizes them to earn a profit.
4. Opportunity cost refers to something that a person “sacrifices” to obtain another
desire. It is the cost of one item or opportunity that is lost to do or consume something
else. Opportunity cost is the value of the next best alternative. An opportunity cost for
me is my siesta or afternoon nap that I am exchanging to finish my requirements for
this month. In exchange for that three-hour sleep, I will be able to finish two or three
essays that helps me to avoid cramming when the deadlines are approaching.

5. Economic good is an item or service that has a benefit to society. It satisfies the
wants and provides utility to the consumer. Economic “bads” are items which lessen the
level of satisfaction of a consumer as their consumption increases. A commodity can be
a good or a bad depending upon people’s preferences.
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2. Positive economic statements are factual, precise, and clearly measurable. It has no
indication of approval or disapproval and describes the “what is” scenario. Negative or
normative economic statements carry opinions, values, and judgements. It shows
approval or disapproval and describes the “what should be” scenario.

Positive Normative
If the government raises the tax on beer, this Climate change is the most serious economic
will lead to a fall in profits of the brewers. problem.
A reduction in income tax will improve the The government should increase the
incentives of the unemployed to find work. minimum wage to reduce poverty.
Climate change is one the most serious Overpopulation is more harmful than
environmental problems. unemployment.
The rising price of crude oil on world markets The government is right to introduce a ban
will lead to an increase in cycling to work. on smoking in public places.
A rise in average temperatures will increase The government should enforce minimum
the demand for sun screen products. prices for beers and lagers sold in
supermarkets to control alcohol consumption.
Cut-price alcohol has increased the demand The government should ban foreigners to
for alcohol among teenagers. control the spread of COVID-19.

A car scrappage scheme will lead to fall in The government should not implement the
the price of second hand cars. anti-terror law to control its citizens.

A broken screen will lead to fall in the price The retirement age should be raised to 70 to
of second hand smartphones. combat the effects of our ageing population.
Higher interest rates will reduce house prices. The retirement age should be raised to 70 to
combat the effects of our ageing population.
The ongoing pandemic has made an impact The government should do mass testing now.
to our economic status.
6. Production possibility frontier is a curve that shows the differences in the quantities
of two products that can be produced if both depend on the same finite resource for
their manufacture. It can be used to demonstrate the point that any nation's economy
reaches its greatest level of efficiency when it produces only what it is best qualified to
produce and trades with other nations for the rest of what it needs.

7. The production probability frontier demonstrates expansion through the  shift of PPF
to the right. The PPF can expand when the improvement of technology and supply
factors of production increases; the economy's capacity to produce both goods
increases; if this potential is realized, economic growth occurs.

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