By referencing events in the news or something from your personal experiences, describe one example of each of the five foundations of economics discussed in this chapter.
Five Foundations of Economics:
Incentives
Trade-offs
Opportunity cost
Marginal thinking
The principle that trade creates value
Answer:
In my home town people involving in the preparation of certain clothes having high cultural and traditional value, get incentives from state government as a concession to stimulate the business.
Trade off is the froces moving in opposite direction. The level of unemployment and the wage inflation in a economy is the best example of trade off.
Opportunity cost is the next best alternative. If i had not doing my current job, then what else i could do would have been my opportunity cost.if my father is producing Paddy but, would have produced wheat instead, the wheat is here opportunity cost.
Marginal concept is very common in daily life. If i am taking biscuits as my breakfast then the satisfaction derived from each additional biscuit is a marginal concept i.e. valuing things at marigin.
Trade creates value through increased specialization in the production of goods having absolute and comparative advantage and subsequently exporting it and fetching the things of its necessity. The resultant mutual benefit from trade is addition to the existing value.
You might also like to view...
In order to bring about a real depreciation of the dollar, the U.S. can hope for
A) a rise in the U.S. price level. B) a fall in foreign price levels. C) a rise in the dollar's nominal value in terms of foreign currencies. D) a rise in foreign price levels or a fall in the dollar's nominal value in terms of foreign currencies. E) increased output and full employment.
Which of the following is true?
A) When income tax rates fall, it is possible for tax revenues to rise. B) When income tax rates fall, it is possible for tax revenues to fall. C) All economists agree that a monetary rule is preferred to discretionary Fed policy. D) All economists agree that discretionary Fed policy is preferred to a monetary rule. E) a and b
The success of the SMarT program has proven that changing the way we present options can:
A. help people overcome mental biases. B. affect people's behavior. C. avoid regret. D. All of these statements are true.
A depreciation of the U.S. dollar relative to the euro would tend to
A. increase U.S. exports to Germany. B. increase both U.S. imports from Germany and U.S. exports to Germany. C. decrease U.S. exports to Germany. D. increase U.S. imports from Germany.