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Economics Worksheet

Economic Concepts Worksheet University of Phoenix UNPLUMBED Concept I Application of Concept from Personal Experience I Reference to Concept in Reading I Scarcity, Trade-offs, Opportunity Cost (p. 3-4, 12) * Scarcity involves resources with limitations; no matter how much money or trade is offered in exchange for resource, there is a demand that will always be greater than the quantities available. * Trade-off involves the final cost for a resource based upon the person or entity giving something or many things up in return for the desired good.

Opportunity cost involves the estimation of the final cost off resource as it is gauged against the value of the alternative or next-best scenario. I Scarcity in Action: Yesterday I went to the market and was going to buy a pint of blueberries to put on waffles the next morning for breakfast. The cost of the pint of berries was $7. 99 when during the summer, the same pint of berries were 2-for-$5. O. Even though the berries were much more expensive, I was willing to pay more because berries are not as prolific in the winter.

Trade-off in Action: In the aforementioned example, there was also a trade-off involved in the acquisition of

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my berries. I was feeling the financial pain as I reached in and paid the money for the privilege of eating a fresh berry during the winter. Opportunity cost in Action: Again, using the example in scarcity, I can apply opportunity cost in my going to the freezer section of the supermarket and getting weighing the product cost of the berries: the cost of the frozen bag (2 pints) was less than half of the market price for fresh berries.

This alternative is a part of the decision-making process. I “Scare resources: The limited annuities of land, capital, labor, and entrepreneurial ability that are never sufficient to satisfy people’s virtually unlimited economic wants” (McConnell & Bruce, 2005, 6-21). “Tradeoff : The sacrifice of some or all of one economic goal, good, or service to achieve some other goal, good, or service” (McConnell & Bruce, 2005, G-24). “Opportunity cost: The amount of other products that must be forgone or sacrificed to produce a unit of a product” (McConnell & Bruce, 2005, G-17).

I Production Possibilities Curve (p. 11-12, 15-18) * Production possibility involves an economies output of goods or resources and all of the various combinations; the curve chart will essentially guide the decision based upon the production outputs at various levels and inputs/outputs. I Production Possibilities Curve in Action: In this scenario, I have Just purchased a small office space on Main Street and I am considering either opening a coffee shop, or tea house.

I could weigh several production possibilities: coffee beans versus tea leaves; donuts versus bagels; coffee cake versus cinnamon rolls. Also, I would need to consider the radius of other coffee r tea houses, the area demographics, the economy of the location. These are all things I can do using a production possibility curve. I “Production possibilities Economics Worksheet By confirm be produced in a full-employment, full-production economy where the available supplies of resources and technology are fixed” (McConnell & Bruce, 2005, G-19).

I Comparative Advantage, Absolute Advantage, Specialization and Trade Balance (p. 90-92, 678-680). * Comparative advantage occurs when one economy has an advantage over another because it is able to generate a particular resource where another economy cannot. * Absolute advantage occurs when an economy can produce a particular resource with fewer inputs and or more efficiently. * Specialization focuses on an economy’s resource for knowledge, skill, or ability in such a way as to improve productivity and increase the market economy. Trade balance or “net export” occurs when there is a parallel increase of Gross Domestic Products (GAP) with the domestic rate of consumption, expenditure, and investment within trade imports and exports. I Comparative Advantage in Action: There are certain lands that are rich and fertile. Some grow crops, some grow vineyards, etc. And there are lands that cannot produce the same types of goods or wine. This comparison would be indicative of either an advantage or disadvantage because the economy is not able to generate the resource another might or vice versa.

Absolute Advantage in Action: There are a limited number of diamond mines in the world and most of the big mines come from Africa. Africa has a much greater absolute advantage over the United States. Specialization in Action: In the countries of China and India, there are more individuals that have specialized knowledge, skill, and ability that are being offered to the U. S. As outsourced products so that companies can acquire labor at reduced prices and increase profitability. Trade Balance in Action: Outsourcing is also a very good example for trade balance in action.

The GAP in China and in India are increasing profitability based upon exported services. I “Comparative advantage: A lower relative or comparative cost than that of another producer” (McConnell & Bruce, 2005, G-3). “Absolute advantage by definition is the ability of one country to produce more of something than another country” (Hoagland, 2008, p. 2, 92). Specialization: The use of the resources of an individual, a firm, a region, or a nation to concentrate production on one or a small number of goods and services” (McConnell ; Bruce, 2005, 6-22). Trade balance: The export of goods (or goods and services) of a nation less its imports of goods (or goods and services)” (McConnell & Bruce, 2005, 6-24). | Economic Systems (p. 29-38). * An economic system identifies the way an economy produces, distributes and consumed the goods and services within its market. I Economic Systems in Action: There are many economic systems covered in text but two specific systems re the Capitalist System and the Communist System.

Differences include individual trade and, personal entrepreneurship while a communist society is more about the community and every one getting paid equally and social care be provided in turn by I “Economic system: A particular set of institutional arrangements and government. A coordinating mechanism for solving the economizing problem; a method of organizing an economy, of which the market system and the command system are the two general types” (McConnell & Bruce, 2005, 6-6). | Economic Institutions, Property Rights and the Role of Incentives (p. 37-338, 549). Economy that collects and studies data pertaining to economics but is also an established structure of economy that is important for the sustainability of a society (I. E. , saving money, tipping). * Property rights are unique to the individual giving him or her the right to own a property and do with it whatever he or she deems fit. * Incentive is a benefit that is given to an individual or group that is used to help motivate them to act in a favorable manner. I Economic Institution in Action: An example would be a regulatory agency within the U. S government that ensures economic needs of the people are being met.

The Federal Reserve System is a good example of economic institution. Property Rights in Action: I am currently in the process of examining the affordability and sensibility of buying a property in Colorado versus renting. I have to think about what my goals are for the long-term and decide if it makes financial sense. However, in having my own place versus renting a place, I would be able to do whatever I wanted and have a pet. This is important to me. Lenitive in Action: If my company turns a profit at the end of the sisal year, the associates are rewarded with a bonus check.

Some years the amount is significant, while others, it is a handshake. This “bonus” inspires the associates to work harder, smarter, leaner, to try to ensure the company remains profitable. I “Property rights encourage investment, innovation, exchange, maintenance of property, and economic growth;… Extend to intellectual property through patents, copyrights, and trademarks… [and] facilitate exchange” (McConnell & Bruce, 2005, p. 60-61). “Lenitive: The market system encourages skill acquisition, hard work, and innovation.

Greater work skills and effort mean greater production and higher incomes, which usually translate into a higher standard of living. Similarly, the assuming of risks by entrepreneurs can result in substantial profit incomes. Successful innovations generate economic rewards” (McConnell & Bruce, 2005, p. 69, 98). I Marginal Analysis, Exchange, Money and Economic Interdependence (p. 5). * Marginal analysis is a way economics can examine small changes in variables of market, production, consumption, policy, and economic cycles. Based upon this analysis economic decisions are made for a society.

Money is the product that works as a monetary tool in the exchange of service or goods. * An exchange system is a way for societies to formally trade or come together in a market where they “barter” to buy goods. * Economic Interdependence occurs when the rates of inflation, unemployment and Gross Domestic Profit (GAP) are either positively or negatively dependent upon one or more country. I Marginal Analysis in Action: As a student in Economics, I am learning how to compare and contrast the way in which the market is impacted by production, consumption, policy and economic trends/ yeses.

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