The Seven Core Principles of Economics - 3028 Words

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†¦show more content†¦The concept of cost-benefit sounds simple enough but to apply it you have to decide how to measure relative costs and benefits which can become tricky. Different people may feel differently about the value of different things. A classic example is whether a not you should walk downtown to save $100 on a $500 dollar guitar. The benefit here is saving $100. The cost being the time it takes for you to walk downtown and what else you could be doing in that time. If you feel that your time is worth $100 than you make the trip downtown. If you feel your time is not worth a $100 then you do not make the trip. However if you decide to make the trip then you should make that same trip to save $100 even if you are buying a $3,000 painting. It is important to ignore proportions and focus on absolute dollar amounts. As long as the marginal benefit of an activity exceeds the marginal cost, people are better off doing more of it. But as soon as the marginal cost exceeds the marginal benefit, they suddenly become better off doing less of that specific activity. This can be used when deciding how many employees a company should have. To produce the profit-maximizing level of output and hire the optimal number of workers, and other resources, producers must compare the marginal benefits and marginal costs of producing a little more with the marginal benefits and marginal costs of producing a little less. You can decide how many workers to hire for a profit-maximizing car company byShow MoreRelatedHow Does New Public Management Change The Public Sector?1344 Words   |  6 Pagespositive consequence of this, there have been increasingly positive changes through the reforms that have been implemented by New Public Management into the public sector. This paper will uncover these reforms by discussing th e establishment, core principles and criticisms of New Public Management and what effect have its reforms had on the public sector. As stated by Dunleavy and Hood (1994), New Public Management was established in the 1970’s and 80’s during a time period where governments wereRead MoreAn Analysis of Freakonomics, by Steven D. Levitt1585 Words   |  7 Pages Economics in reverse is the best way of describing the unconventional method preferred by economist, Steven D. Levitt. While most economists measure social situations and present the data as numbers and graphs Levitt takes anomalies within the data to reveal truths obscured. It’s Levitt’s sociological take on economics that has set him apart from his peers with his heavy focus on incentives, choices, and the consequences they have. Freakonomics mirrors Levitt’s method since it’s a collectionRead MoreA Book On Economics Was Not Something That Was Pre Planned Essay1630 Words   |  7 PagesMy venture on writing a book on economics was not something that was pre-planned. It was neither an attempt to extemporiz e on the current economic events that were taking place globally since the 2008 financial crisis. If it totally depended on my determination I would rather not have ventured into it, albeit the impregnable impulse to dive into it. There were unassailable challenges that delayed the project. Such experiences were a learning curve and added more quality to the work. This book isRead MoreEco 201 Final Project (Selected Topic Is Ford Motor Company)988 Words   |  4 PagesFord Motor Company) Click Link Below To Buy: http://hwcampus.com/shop/eco-201-final-project/ ECO 201 Final Project Guidelines and Rubric Overview The final project for this course is the creation of a research paper. Every day, millions of economic choices are made by people—from what brand of soap to buy to how many employees to hire for a factory. Microeconomics provides us with the tools, models, and concepts to better understand individual choices in the marketplace and how resource allocationRead MoreRogue Community College ( Nsc )779 Words   |  4 PagesStudent Services (chief student services officer), one Vice President of Instructional Services (chief academic officer) and one Vice President of College Services (chief informational officer). We have nearly ten thousand credit students and around seven thousand non-credit students. Fifty-six percent are women and forty-four percent are male, with the average age of thirty-two. Recently, our local spring election passed a new bond which will create an opportunity for RCC to expand into new educationRead MoreRitz Carlton-Hotel Company Essay1279 Words   |  6 PagesIntroduction The standard â€Å"seven day countdown† prior to a hotel opening is currently used by The Ritz-Carlton Hotel Company as a state of the art blitz, to acclimate new employees to the principles and standards of hotel operations. However, pressure from Brian Collins, parner and current chief operating officer for Millenium Hospitality Partners, is questioning the validity and effectiveness of such a routine procedure. These concerns are primarily focused around the opening of the WashingtonRead MoreSocialism And Laissez Faire Of The United States1147 Words   |  5 PagesNations have debated on which economic direction their country will direct its footsteps since the creation of societies. The United States, being one of the most stereotypical capitalistic nations, began as a Laissez-faire nation, but throughout the centuries America’s economic standpoint has shifted more into Socialism rather than Laissez-faire. The second largest economy in the world, China, is widely u nderstood as being a socialist country, however, for the past years they have been inclinedRead MoreEssay on Epitome of Enlightenment 1232 Words   |  5 Pagesapplying scientific principles of logic and reasoning to all endeavors of life. Having become established in America by the mid-18th century, Enlightenment principles were practiced by many of the most notable â€Å"fathers† of the American Revolution. The American Declaration of Independence, written in 1776 is one of the most significant examples of a document whose writing was motivated by enlightenment principles. (http://dogofletters.wordpress.com). It proposed some basic principles of how the authorsRead MoreHeineken Case Analysis1700 Words   |  7 PagesFurther, the industry is subject to restrictions in advertising, marketing and sales distribution. (Imbs, J. 2013). External Cultural Factors Sociocultural factors must be considered that apply to lifestyle changes, economic concerns in identifying use of disposable income, and the level of social impacts. These factors affect consumer’s behaviors when making purchasing decisions of their preferred alcoholic beverage. Further, these sociocultural factorsRead MoreNational Association Of Social Workers1191 Words   |  5 Pagesthe client to encourage social change. (National Association of Social Workers, 2008) NASW Code of Ethics contains a set of core values on which the code is based. The core values have been embraced by social workers throughout the profession’s history, and are the foundation of social work’s unique purpose and perspective. (National Association of Social Workers, 2008) The core values are: service, social justice, dignity and worth of the person, importance of human relationships, integrity, and competence