What is the study of the decision making of individuals and firms over the allocation and use of scarce resources?
Economics. The study of how individuals, firms, and society make decisions to allocate limited resources to many competing wants.
Is the study of how individuals and societies allocate scarce resources among many competing uses and how this decision making affects the economy at large?
Economics is the study of how individuals and societies, experiencing virtually limitless needs and wants, choose to allocate scarce resources to satisfy those needs and wants.
What is the study of how individuals firms and nations can best allocate their limited resources?
Economics is a social science concerned with the production, distribution, and consumption of goods and services. It studies how individuals, businesses, governments, and nations make choices about how to allocate resources.
How individuals and firms make decisions economics?
Individuals make decisions based on the concept of utility. This concept is called rational behavior or rational decision-making. Businesses make decisions based on the competition they face in the market. The more competition a business faces, the less leeway it has in terms of pricing.
Why is opportunity cost important to government?
(ii) Importance of opportunity cost to the Government: It helps the government in deciding which sector will receive more resources. It helps the government in making decision on how to spend its revenue in carrying out its numerous projects, e.g. the government may allocate more resources to defence or infrastructure.
Why is opportunity cost important for economists?
As a representation of the relationship between scarcity and choice, the objective of opportunity cost is to ensure efficient use of scarce resources. Opportunity cost also includes the utility or economic benefit an individual lost, if it is indeed more than the monetary payment or actions taken. …
Why are scarcity opportunity cost and purposeful behavior at the heart of economics?
Explain. An opportunity cost is what was sacrificed to do or acquire something else. The condition of scarcity creates opportunity cost. It is an important component of purposeful behavior because people will allocate their scarce time, energy, and money in an attempt to gain the most utility possible.
What is a positive economic statement?
Positive economics is objective and fact-based where the statements are precise, descriptive, and clearly measurable. Here’s an example of a positive economic statement: “Government-provided healthcare increases public expenditures.” This statement is fact-based and has no value judgment attached to it.
How does utility relate to purposeful behavior?
“Utility” refers to the pleasure, happiness, or satisfaction gained from engaging in an activity (eating a meal, attending a ball game, etc.). It is an important component of purposeful behavior because people will allocate their scarce time, energy, and money in an attempt to gain the most utility possible.
Which of the following best describes the concept of utility and economic behavior?
Which of the following best describes the concept of utility and economic behavior? Satisfaction from consuming goods or services. Explanation: In a market system scarce goods are allocated through the operation of what must be sacrificed in using a resource for its next best use.
What is not considered an economic resource?
Economic resources are the scarce resources which help in the production of goods and services. Air, water, and sunlight are not the economic resources. This is because these resources are present in abundance which means they are not scarce. The example of economic resources are land, labour, capital.
How is opportunity cost related to the supply of goods and services?
When buyers face higher opportunity costs to acquire a particular good or service, they react by seeking less costly substitutes; thereby reducing quantity demanded. Thus, a changing money price causes the marketplace to reach equilibrium between quantity supplied and quantity demanded.