Essay Economic Problem

Fundamental Economic Problem
This essay will explain the fundamental economic problem in Hospitality Industry at Restaurant
Sector. It will also discuss about the determinant of demand and supply in Restaurants.
The central economic problem is scarcity. This problem applies around the world. According to
Sloman, Norris & Garratt (2010, p.5) "scarcity is the excess of human wants over what can actually
be produced to fulfil these wants". It means human wants are virtually limited. Every country can
only produce limited quantity goods and service. Human demand a lot of things that is very limited
to supply. With the factors of production, we can limit the good and service human wants. Labour is
a human form contribution that can be restricted in number and skills....show more content...
Depending on the profit of each area, the manager will decide which area should be extended and
will gain more profit. If the restaurant earns more money than the other, the manager will extend the
restaurant floor to accommodate more seats for the customer.
Third determinant of supply is the profitability of goods in joint supply. It is describe as when one
good is created; another good is also created at the same time. For instance, restaurant serves for
people having lunch or dinner constantly but also they provide functions room for birthday or
engagement party. They can provide range of service at the same time.
Fourth determinant of supply is nature, random shock and other unpredictable events. This is can be
earthquakes, floods, fire, machinery breakdown etc. that can affect restaurant facilities. This can
decrease their supply for the restaurant and services.
Fifth determinant of supply is the aims of producers. Profit–maximising manufacturer will supply
different quantity from a manufacturer that has different aim, like maximising sales. For example,
restaurant A will supply good quantity of food in higher price; restaurant B will supply the same
good quantity of food but in reasonable price.
Sixth determinant of supply is expectation of future changes. If the prices are expected to increase,
the producers may momentary decrease the amount they sell. For example, after Christmas,
customer will tend to stay home or visit their
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Economic Problem Essay
Along with the development of the earth is a series of social events need to be addressed, such as
population growth, food shortages and water shortages in many parts of the world. Specifically,
people in Australia are facing with the threat of water shortage in the future. This problem has
created an economic problem and urged the Australian government to find the solutions for this
problem. This essay will explain the economic problem and answer the question how do markets
attempt to solve the problem of water scarcity in Australia, focusing on the economic problem, water
scarcity in Australia, the role of markets and water market in Australia.
The economic problem can be known as the competition between unlimited wants and scarce...show
more content...
In order to solve the economic problem, we must choose how to use our scarce resources efficiently.
If the choices are made, sources can be used efficiently. For instance, the Australian Governments is
restoring the Balance in the Murray–Darling Basin to keep the water in this basin and protect the
environment. They are making decision since the water is scarce. Australian Governments (2010)
showed that water which available in Murray–Darling Basin declines, so this basin is likely to
become worse. The problem is water in Australia is not unlimited. We therefore have to make
choices. The choice can be known as opportunity cost. Since we never have enough resources at
our disposal, we have to give up something in order to get another thing we want. For example,
Morton and Shippen have to make the decision between selling water to the government or keeping
the water for their using and their agriculture. If they decide to keep the water, the money from
selling water is forgone and vice–versa. So, scarcity forces making choice.
The role of market can help solving the economic problem. A market can be known as an actual
place where buyers and sellers interact to trade goods, services for money. They interact in the
market to determine the price.
The diagram shows the way market finds the price for water. At point E, quantity demanded equals
quantity supplied and the price of goods that customers are willing and able to buy equals the price
of goods

What Factors Affect The Economy Of Japan
1. A Brief Introduction Japan was a country that defied all odds and became a world power after
losing a devastating war. In the 30 years after World War II the Japanese economy grew at an
incredible rate, so much so in fact that Japan became the second largest economy in the world. Japan
managed to successfully enact an economic system wholly different than that of the United States
and because of it Japan experienced incredibly rapid growth over a period of roughly 30 years.
During that period of financial power, exports were booming, the standard of living was rising, and
technology was thriving. This period of growth however, did not last; in the late 1980s the bubble
burst. In 1991 and again in 1997, Japan's stock index, the...show more content...
The current outlook on the future of Japan is grim; Japan needs to alter their ways in order to get
back on track and continue being a major economic power. Source: (Vogel, 2006)
2. A Unique Japan 2.1 Coordinated Market Economy A key concept embedded in the Japanese
model (prior to 1990) is keiretsu. Japan had a coordinated market economy rather than a liberal
market economy like the U.S. (Table I). This essentially means that Japan "fostered long–term
cooperative relationships between firms and labor, between firms and banks, and between different
firms." (Vogel, 2006) This network of relationships, called a keiretsu, proved stable, with the
bureaucracy protecting industry from international competition and maintaining many aspects of the
private sector. The bureaucracy played a large role in Japanese economics. Some claim that "Japan's
elite bureaucrats were too powerful and too inclined to meddle in markets," thus factoring into the
economic crisis facing Japan today (Vogel, 2006). 2.2 Long–term Employment
In Japan, long–term employment was the norm. That is, workers would remain loyal to the
corporation they worked for, and unlike in the United States, very well might work for the same
company their entire life. This gave corporations an incentive to invest time in their workers and thus
foster their loyalty. These long–term

Economics : Basic Economic Concepts Essay
Kingman Academy of Learning
Economics a Social Science
Basic Economic Concept
Jordan Mcdowell
Civics
K.David
5 December 2016
. Economics a Social Science
Basic Economic Concept
Scarcity
Supply and Demand
Utility
Measurement of Economic Performance Gross domestic product (GDP)
National Income and Price Determination
Stabilization Policies
Demand management policy
Fiscal policy
Monetary Policy
Economic Growth
Open Economy: International Trade and Finance
To understand economics, one must first explore the basic economic concepts. The first of the
basic economic concepts is scarcity, "a situation in which there is not enough of something"
(Coolridge). So an economic scarcity is the limited resources or goods compared to the unlimited
wants and needs of consumers. For example, pumpkin pie is sold largely in the fall and is
abundant. However, in the later months of winter, pumpkin pie is still in the same demand as in
the months of fall. Here is where scarcity will become apparent. The supply of pumpkin pie can not
meet the demand the amount of pumpkin pie consumers want. Scarcity can also dictate what a
consumer may buy and the amount of a product they may buy. For instance: Fossil fuels use in the
United States of America. "Should the tile world continue to be dependent upon its fossil fuels for
its energy requirements, the peak of coal production would probably be reached within the next 200
year, and that of oil in about 50

What is Economics? Essay
Many people think that economics is about money. Well, to some extent this is true. Economics has
a lot to do with money: with how much money people are paid; how much they spend: what it costs
to buy various items; how much money firms earn; how much money there is in total in the
economy. But despite the large number of areas in which our lives are concerned with money,
economics is more than just the study of money.
It is concerned with:
В·The production of goods and services: how much the economy produces; what particular
combination of goods and services; how much each firm produces; what techniques of production
they use; how many people they employ.
В·The consumption of goods and services: how much the population as a...show more content...
There are three types of resources:
В·Human resources: labour The labour force is limited both in number and in skills.
В·Natural resources: land and raw materials The world's land area is limited, as are its raw materials.
В·Manufactures resources: capital
All inputs into production that have themselves been produced: e.g. factories, machines and tools.
One must bear in mind that our wants are virtually unlimited, while the resources available to
satisfy these wants are limited. In other words when society demands more of a product than can
actually be produced to fulfil those wants we have a problem of scarcity. An example of this would
be the OPEC oil price shocks between 1973 and 1980. Yes, it is true that the price of oil rose and
some individuals used substitutes but the economies of oil importing countries like Germany and
Japan fell because OPEC now had more buying power since they had the control over a scarce
resource. We can therefore think of oil as having become scarcer in economic terms when its price
rose.
Earlier I stated that economics is concerned with consumption and production. We can look at it in
the terms of demand and supply. It is simply the quantity of a good buyers wish to purchase at each
conceivable price. Three factors determine demand:
В·Desire
В·Willingness to pay

В·Ability to pay
Whilst supply is the quantity of good sellers wish to sell at each conceivable price. Supply is

Section A Question One: a)Define economics using an example of economic problem from your
own life. Economics is the social science concerned with the production and consumption of
goods and services and the analysis of the commercial activities of a society. Economic problem
is to match resources to the unlimited wants and needs. For example: if you have $10 to spend,
and you want to buy a book which costs $10 each and a pencil that costs $1 each. Now buying a
book mean the loss of the benefit that would have been gained from the 10 pencils. b)Outline the
steps needed to develop an economic model. Explain how models help in economic
decision–making. An Economic model is defined as a theoretical construct that represents economic
processes through a set of variables and a set of logical or quantitative relationships between the
two. The steps needed to develop an economic model are:– 1.Identify the problem 2.Identify
stakeholders in the problem 3.Identify alternate strategies to solve problem 4.Identify resources to
implement chosen strategy 5.Implement 6.Evaluate "what was accomplished" 7.Modify or
Disseminate problem Models help in decision–making as they focus to gain a better understanding of
how things work, to observe patterns, and to predict the results of stimuli. They help to simplify
and abstract from observed data, and also serve as a means of selection of data based on a paradigm
of econometric study. b)Construct a Production Possibility

Economic Issues Faced By Consumers And Producers
Scarcity is one of the most fundamental economic issues faced by consumers and producers alike. It
refers to a situation where decisions have to be made in how resources should be allocated to match
the unlimited wants of consumers. According to Investopedia "Any resource that has a non–zero
cost to consume is scarce to some degree". This can range from anything such as water, food, petrol
to homes or cars. Many people confuse shortages with scarcity. A shortage (study.com) "occurs
whenever quantity demanded is greater than quantity supplied at the market price". A shortage is
only a short term issue and resources will eventually be replenished, whereas scarcity is a "naturally
occurring limitation on the resource that cannot be replenished". While scarcity is undeniably a huge
issue in economics, there are other issues that we face. For example, one issue is the concept of
opportunity cost. Opportunity cost refers to a situation where one course of action has caused the
loss of alternatives by choosing a different course of action. For example, if the government decided
to spend on improving education, other areas such as healthcare, military, infrastructure etc. would
have been the opportunity cost. The two fundamental paradigms in economics are known as the
exchange and production paradigm. The exchange paradigm, which is used to understand
neoclassical economics, is one which identifies itself with studying individuals as well as the
allocation of resources (addresses

Microeconomic
Basic economic problem
All societies always having the economic problem and the problem is of how to make the best use
of resources, limited or scarce. It is exists because of the resources available to satisfy the wants and
needs which is limited even though the wants and needs of people are endless. To match the limited
resources to the unlimited the wants and needs is the main of economic problem.
Limited of resources
There are 2 essential ways of limited resources:
1.Physical quantity is limited, for example, land cases that has a finite quantity.
2.Use is limited, for example, the labour and machinery cases that only can be used for one purpose
at only one time.
Choice and opportunity cost
In economic, the two fundamental concepts are choice and opportunity. Producers and consumer
have to make choice between competing alternative...show more content...
In traditional, surplus is a rare thing that can happen. The resources necessary does not have in a
indigenous country or a third–world. They are controlled by wealthier economies and maybe by
force if they do., any surplus is either wasted, distributed or paid to certain authority that has already
been given the power and this happen in many cases.
Advantages And Disadvantages of traditional economy
Advantages that are certainly the most obvious is that custom and tradition is preserved while it is
nearly to non–existant in mixed or market economies. There is also the fact that more specific and
pronounced role is getting by each member of a traditional economy, and this societies are always
have a very close–knit and socially satisfied. For disadvantage, the main disadvantage is that
traditional economies are not enjoying the things and the other economies are taking for granted for
example, centralized utilities, western medicine and technology.
2. Command Economic

Scarcity And Scarcity Of Economics
Scarcity: Scarcity is a key concept in economics because it is one of the basic foundations of why
economics exists. Scarcity means that there is a limitation of resources. Since there is a limitation
of resources it is important to to know how these resources will be used. In a world without
scarcity (which doesn 't exist), we could have access to whatever we wanted and there would be no
need to trade or distribute goods and services, and therefore no economics. Economics studies
human behavior and how humans allocate their limited resources (scarcity) with their unlimited
wants and differences in the distribution of these resources affect decisions. This concept can be
applied to a single person, a family, a country, and globally . Opportunity Cost: Since we have
limited resources (scarcity), we usually have to choose one option (choice) and forgo the other
alternative when another item or activity is chosen. The concept of opportunity cost is important in
economics because any decision that involves a tradeoff between two or more options has a relative
cost. In other terms, opportunity cost is the the relative cost of one alternative in regards to the the
next–best alternative. Making Choices at the Margin: Almost all decisions are made at what
economists call the "margin" or making decisions based on small changes in resources. This is an
important concept in economics because most people do not make all or nothing decisions, it is
usually an addition or subtraction

Economic Problem in the Philippines
10 Economic Problems of the Philippines 1. Over–dependence on Global Economy The growth of
the Philippines economy drastically slowed to just 3.6% in the first three quarters of 2011, which is
significantly less than the 7%–8% growth targeted by administration's Philippine Development Plan
(PDP). Though the slowdown may have been due to the ongoing global crisis, it was markedly
slower in comparison to other South–East Asian neighbors. Economic performance figures indicated
a contraction in exports and a drop in FDI. Though the remittances from overseas Filipinos to the
country grew in the first ten months of 2011, however the compensation that overseas Filipinos
received actually fell, in peso terms, due to an appreciating...show more content...
We need to improve more citizen empowerment by Personal Monetary emitting. We need to improve
more popular access to micro credits. 4. Scarcity of Resources. Scarcity is the fundamental economic
problem of having humans who have unlimited wants and needs in a world of limited resources. It
states that society has insufficient productive resources to fulfill all human wants and needs.
Alternatively, scarcity implies that not all of society's goals can be pursued at the same time;
trade–offs are made of one good against others. In an influential 1932 essay, Lionel Robbins
defined economics as "the science which studies human behavior as a relationship between ends
and scarce means which have alternative uses. 5. Poverty Poverty is the state of one who lacks a
certain amount of material possessions or money. Absolute poverty or destitution refers to the
deprivation of basic human needs, which commonly includes food, water, sanitation, clothing,
shelter, health care and education. Relative poverty is defined contextually as economic inequality
in the location or society in which people live. To resolve poverty Filipino people must be given a
job with a right salary. Education must be a right not a privilege. Government must consider
education as a key to people's success. There must be a branch of government whose function is to
solely look over and follow up those people who suffers from poverty. And teach them how to

Essay about Economics homework problems
Individual HW2 Name: 8–1 Widget Market The widget market is competitive and includes no
transaction costs. Five suppliers are willing to sell one widget at the following prices: $30, $29,
$20, $16, and $12. Five buyers are willing to buy one widget at the following prices: $10, $12, $20,
$24, and $29. What is the equilibrium price and quantity in this market? Equilibrium price is $20
and the quantity is 3 units. 8–4 Candy Bars Market a.In the accompanying diagram (which
represents the market for chocolate candy bars), the initial equilibrium is at the intersection of S1
and D1. Circle the new equilibrium if there is an increase in cocoa prices. b.In the same diagram, the
initial equilibrium is at the intersection of S1 and...show more content...
Number of firmsHighLow Fixed costsHighLow Level of product differentiationHighLow Industry
growthHighLow Buyer switching costsHighLow 10–3 Intangible Resources Why might intangible
resources like human capital and intellectual assets be a more likely source of sustainable
competitive advantage than tangible resources? These create ambiguous resources that are difficult
to duplicate. Competitors will have a hard time re–creating the particular resources that deliver the
advantage. 10–6 Salons and Teeth Whitening Salon owners have recently started offering teeth
whitening services to clients in addition to their more standard services. In a number of states,
regulators have ordered the salon owners to stop, claiming that this service constitutes the practice of
illegal dentistry. What group would you expect to be behind the state's efforts to ban salons from
providing teeth whitening services? Why? Probably the national dental association. By making the
state enforce that it is illegal dentistry this allows them to reduce competition in the industry to slow
the erosion of profitability. 14 –1 Barbie Dolls and Accessories Why does Mattel set a much lower
contribution margin on its Barbie dolls than on the accessories for the dolls? They do this as indirect
price discrimination. The low value and high value customers identify themselves by the number of
accessories they buy. 14–3 Selling Salsa Your

Economic Problems Faced by Pakistan
History Of Pakistan
Economic Problems Faced by Today's Pakistan
Table of Contents
Introduction4
Poverty4
Illiteracy5
Corruption & Political Instability5
Over Population, Unemployment & Inflation6
International Interference8
Terrorism/Extremism8
Recent Floods9 Long–Term Effects of Pakistan Floods9
Reference11
Introduction
Pakistan was established in 1947 and since its inception; it has been surrounded by countless issues,
some of which are confined to ill–formed/missing infrastructure, insufficient refined resources,
barren or obsolete factories and technologies, the Kashmir controversy and other fronts also
involving an ever–ready enemy to underscore its efforts towards progress. Despite being rich in
natural resources,...show more content...
It is interesting to note that due to international interference and manipulation, the very same
people that we have previously labeled as corrupt, blamed and rebuked for their acts, have come
back to govern us after a couple of years and the very same people have welcome them with open
arms, representing the inconsistency and apprehension instilled in our social, economic and political
framework. A common English saying goes as "fool me once, shame on you, fool me twice, shame
on me".
This has also been one of the key reasons as to why the political process in Pakistan has not
prospered so far into any rational coalition. Soon after its inception the sincere and loyal politicians
were removed from the main stream and dupes and rubber stamps were put into place, where the
final authority has relied upon decisions made outside the country.
Over Population, Unemployment & Inflation
On the one hand we have had years of low GDP growth and on the other a high population growth
combined to place Pakistan in a situation where the stability of its economic pie has not been
increasing fast enough to facilitate and extricate the country from the poverty trap it was inflicted
upon in it's making. To compound the problem, recent years have seen food prices and utility tariffs

shooting up by a wide margin, making it increasingly difficult for people to make

The Economic Problem Of Homelessness
Economic problems such as being laid off of work or the rise in the cost of housing has lead
people to live on the streets. Many of the homeless are women that have become divorced or have
left home because of physical abuse. These women have no education because they have not been
given the chance to go and get the education that it takes nowadays to get the job, so they are
forced to live on the streets. They have no family to help them and they are left with no other
choice. People with mental illnesses also become homeless quite often. These people are
incapable of handling the stress of living on their own. These people get kicked out of their
homes and are too ashamed to go to their families because of their illness, so we see them on the
streets struggling to stay warm. Teenage mothers are also forced to live on the streets because
their families will not help them. The fathers are not there and that forces them to live on the
streets. So, they must resort to prostitution to pay for the food that their young ones need to stay
alive. There are many other people that become homeless for many different reasons. Some of
these people cannot help becoming homeless. Some of these people are the illegal immigrants that
come here from other places to get a better life but end up not having enough money to make it in
this hard world that we live in. Teenage runaways have different reasons for leaving home but all
have some of the same reason for becoming homeless. They simply

Economic Issue Analysis Paper
My paper was about the economic issue that I encountered during the process of buying a house
in the United States. My family went through a dilemma of buying our own home in Columbus,
Ohio on April 19th, 2003. I strive in developing detail; however, I struggle in grammar and
punctuation. My strength of expressing the experiences I went through was, I gave the most
important details of my family. For instance, the process of dealing with the banking system, the
interest rate, and down payment was too much. My idea was to deliver my message and get the
reader's attention on my ordeal. My topic was structured to draw the reader's mind to what the
significant points of buying a house in the United States. I used supporting details without leaving
the reader hanging there with no idea what is going on or what I am trying to say. Although my
budget was not as much as the house seller expected, I wanted buy a house for my family with
good neighbors and decent schooling system. In my writing, I was having grammar and punctuation
issues. I used second person instead of the first person and vague words, like "things". I had
pronouns misused, commas left out and used two words with the same meaning in a paragraph. Also
in sentences, numbers need to be spelled out instead of writing down that number. In MLA format,
the dates...show more content...
I will do my best to work hard on my sentence structure, subjects and verbs agreement and to avoid
passive voice in my future papers. I am developing my skills to improve in my word choices and
sentence errors. In addition, I would like to tell anyone who just came to the U.S.A. and wants to
go to school to do one thing at a time. Going to school, having a family and working is difficult. It
was hard for me and my family, but with work of the government modification agent and with
prayers we were able to get back our home, jobs, and my husband was able to finish his R.N. and
now we are

The Problem Of A Economic Crisis
The aim of this report is to understand what happened globally in economy for the last 7 years in
order to build an affective and precise managerial strategy for Global Hotel in to generate
profitability and create a successful business.
What is the meaning of crisis and economic recessions?
Business Dictionary is defining crisis as "a situation in witch an economy experiences a sudden
downtown brought on by a financial crisis" (BusinessDictionary.com, 2014).
The major sign of an economic crisis is the falling of GDP, the drying up of liquidity and rising or
falling of prices generated by inflation or deflation. One form of economic crisis is the recession.
The National Bureau of Economic Research is defining economic recessions as "a significant decline
in economic activity spread across the economy, lasting more than a few months, normally visible in
real gross domestic product (GDP), real income, employment, industrial production and
wholesale–retail sales". More specifically, recession is defined as when businesses cease to expand,
the GDP diminishes for two consecutive quarters, the rate of unemployment rises and housing prices
decline." (Morah, 2009)
The reasons of world recession?
The actual economic crisis were starting in 2008 with a financial crisis that had spread though the
USA and became quickly almost global, affecting world economy.
David Kotz, considered that world economy faced not just a severe economic and financial crisis, but
structural, neoliberal

business economics Essay
Table of Contents 1.INTRODUCTION 2.MAIN BODY 2.1THE NATURE OF RESOURCE COST
STRUCTURE AND THE PRACTICAL SIGNIFICANCE OF DIFFERENT COSTS 2.2THE
FACTORS INFLUENCING OPTIMUM SIZE AND THE SIGNIFICANCE OF DEMAND AND
SUPPLY RELATIONSHIPS 2.3UNDERSTANDING OF THE RELEVANCE AND
LIMITATIONS OF ECONOMIC THEORY TO MANAGE DECISIONS 3.CONCLUSION
1.INTRODUCTION: From the economic perspective, there are a full range of wants from
individuals, firms and government but there is only a few number of resources or factors of
production such as land, labour, capital and enterprise. The raw material will come from land,
taking the example of oil, gas. The labour relates to the individuals able to work. The capital covers
machinery,...show more content...
Equipment, everything used to bring all the materials together, for example, cranes, welding sets,
computing time, mobile offices. It is also important to know how much money committed to spend
at any point in time. 2.1.1The microeconomics perspectives: This focuses on the market behaviour
of individual consumers and firms to help understand the decision making process of firms and
households. This is at a level of individual buyer and individual seller, meaning demand and
supply. How much to produce and how much to charge for it. The law of the demand is that the
demand decreases when the price increases and the demand increases when the price decreases.
Also more demand of a product results in an increase of the price the price of that product. (See
graph below). 2.1.2The macroeconomics perspectives, focuses on the big picture of the national
economy as a whole and provides a basic understanding of how things work in the business
environment. The macrocosmic policy goals will be achieved by the monetary policy and the fiscal
policy. The monetary policy is the management of the nation money supply, the decision of the
interest rate and the banking system to promote economic growth, lower unemployment and
inflation. 2.2The factors influencing optimum size and the significance of demand and supply
relationship: The demand and the supply are two main concepts of the economy. Demand is what
quantity of product or service

The Economic Problem Of The Market Economy
The economic problem faced in the market economy is that there are an unlimited amount of wants
with a scarce amount of resources. They only current solution is to make decisions as the desire of
satisfying all wants is not possible. Economics is the about the allocation of limited resources in the
best possible way in order to satisfy needs (items essential for survival – food and shelter) and wants
(not necessities, but provide satisfaction and assist achievement of higher standard of living). In
order to choose where to allocate resources, four fundamental questions must be attempted to be
answered: 1. What to produce? 2. How much to produce? 3. How to produce? 4. How to distribute
production? And with the usage of potential answers, opportunity cost (the loss of other alternatives
when one alternative is chosen) occurs with every decision made. Individual consumers, business
firms and the government are faced with the economic problem and must observe choices whilst
considering the opportunity cost of these decisions which makes different economic factors such as
individuals, businesses and the government address this problem in diverse ways. There are four
fundamental questions, which assist addressing the economic problem when businesses need to
prepare to produce goods and services: 1.What to produce? 2.How much to produce? 3.How to
produce? 4.How to distribute production? Question one simply means that because of limited
resources and unlimited wants,

Economics Problems Set 1
MBA–FP6008: Assessment 1, Economics Problem Set 1
Dennis J. Johnson
Capella University
08/12/2015
Problems A, B, and C
Introduction
This assessment will be an analysis of graphed data and changes in supply and demand for three
economic problems. Problem A involves production possibilities for consumer and capital goods,
problem B is an evaluation of changes in supply and demand equilibrium, and finally, problem C
involves pricing with relevance to supply and demand. Successful completion of this assessment
demonstrates proficiency in; applying theories, models, and practices of economic theory, analyzing
solutions with support from relevant data, resources, references, and economic principles, analyzing
graphed and circular...show more content...
3. If hypothetically the economy were producing only1 butter and 10 guns, it could be concludes
increasing opportunity cost, because when the graph moves from A to E, it must give up larger
amounts of butter to acquire equal amounts of guns. This is shown through the slope of the
production possibilities curve, which gets steeper as we move from A to E (McConnell, Brue, Flynn,
2015) 4. Production outside the production possibility curve would currently be unattainable. The
production that is attainable is inside of, on the shape of, or on the line of the curve. Technological
changes such as production methods, could allow for attainability of production outside of the curve,
as technological advancements may allow production of more guns and butter. International trade
permit consumption also allows for production beyond the possibilities curve, in that the country
being traded to may specialize in guns and butter. We could trade something that we produce at a
very low opportunity cost, therefore making production of guns and butter cost less. (McConnell,
Brue, Flynn 2015)
Problem B.
Evaluate each of the following changes in supply and/or demand. How will each affect equilibrium
price and quantity in a competitive market? Will price and quantity rise, fall, or be unchanged?
Based on shifts, will the answers be indeterminate? 1. Supply decreases and

Economic Problem
CHAPTER 4 INDIVIDUAL AND MARKET DEMAND EXERCISES 1. An individual sets aside a
certain amount of his income per month to spend on his two hobbies, collecting wine and collecting
books. Given the information below, illustrate both the price–consumption curve associated with
changes in the price of wine and the demand curve for wine. |Price |Price |Quantity |Quantity
|Budget | |Wine |Book |Wine |Book | | |$10 |$10 |7 |8 |$150 | |$12 |$10 |5 |9 |$150 | |$15 |$10 |4...show
more content...
In this case, the consumer always purchases the cheaper of the two goods (assuming a one–for–one
tradeoff). If the price of orange juice is less than the price of apple juice, the consumer will purchase
only orange juice and the price–consumption curve will lie along the orange juice axis of the graph
(from point F to the right). [pic] If apple juice is cheaper, the consumer will purchase only apple
juice and the price–consumption curve will be on the apple juice axis (above point E). If the two
goods have the same price, the consumer will be indifferent between the two; the price–consumption
curve will coincide with the indifference curve (between E and F). Assuming that the price of
orange juice is less than the price of apple juice, the consumer will maximize her utility by
consuming only orange juice. As income varies, only the amount of orange juice varies. Thus, the
income–consumption curve will be the orange juice axis in the figure below. If apple juice were
cheaper, the income–consumption curve would lie on the apple juice axis. [pic] 4. b. Left shoes and
right shoes are perfect complements. Draw the appropriate price–consumption and
income–consumption curves. For perfect complements, such as right shoes and left shoes, the
indifference curves are L–shaped. The point of utility maximization occurs when the budget

Following the economic boom of the 1920s, there was a period of economic depression. The United
States and its citizens were greatly affected. There were many economic problems that occurred such
as unemployment rate rising tremendously and many more. Herbert Hoover and Franklin D.
Roosevelt were presidents during that time and dealt with the economic problems. They helped
create programs to financially stabilize the country again. The Great Depression ended when the
United States entered World War II. The collapse of the stock market in 1929 marked the downfall of
America along with the constant dustbowls. Document 3 shows a chart of the stock market crash of
1929 and how it increased the rate of unemployment in the United States. It...show more content...
Both presidents tried their best to pull up the broken economy to its feet. Franklin D. Roosevelt's
plan helped make the economy get stable through programs that he started, helping create more
jobs for the unemployed. He passed bills that helped both the American people and its
environment. For example, new roads and bridges were built. Another one of FDR'S efforts to get
out of the depression was to enter WWII. Document 6 shows a cartoon of how much was produced
for the war and shows Uncle Sam working, too. Overall, FDR's decision to enter the war was the
greatest impact on the Great Depression because they got out of it. Herbert Hoover was a terrible
leader in many Americans' views because they believed he did not do enough for the people and
was more supportive toward big businesses. He gave money to the rich so that they would pass it
down to the poor but instead the rich got richer and the poor got poorer. Another downfall of
Hoover was Hoovervilles. These were a collection of poor people without homes. The name was
given as a disgrace to Hoover. In result, FDR was a more favored president during the Great
Depression than Hoover. The 1930's was an era of harsh times for the American until they entered
World War II. The stock market crash and dustbowl contributed to the start of the downfall of
America for a period of time. Franklin D. Roosevelt and Herbert Hoover both

Essay Economic Problem

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