econ paper

econ paper - Essentials of Economics defines economics...

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Essentials of Economics defines economics as “the study of how people, institutions, and society make economic choices under conditions of scarcity” (pg 4). It is the belief that are goods and services are limited and therefore when a consumer makes a choice of one good over another, something is sacrificed along the way, whether it is a decrease in another good or a decrease in service. Opportunity costs or the value of what is given up to obtain something else (pg 4) is used to weigh different options and different choices. These basic definitions for economics help explain why individuals, businesses and governments make the choices that they do. In economics, every good and service has a cost associated with it and one must decide what to use their resources for. By comparing marginal costs (the added total cost from the production of one additional unit) with marginal benefits (the benefits one obtains from the decision), consumers can make decisions based on their wants and needs. These fundamentals of economics lay the groundwork for economic theories and principles. When comparing different economic societies, it is important to recognize their economic system. While most societies and countries currently use the market system or capitalism, there are a few remaining countries that continue to use the command system or communism. The command system is an interesting idea of what could be produced when a strong government plans the whole economy and sets into motion a production goal for each good and service. In theory, the system could work, however in today’s society; no country has been able to achieve it. The market system is found in almost every developed country in the world. Through private ownership it brings sellers and buyers together and promotes healthy competition. This competition of goods and
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econ paper - Essentials of Economics defines economics...

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