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Economics Name of the University Author Note

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Southern Cross University

   

Economics For Decision Making (ECO10250)

   

Added on  2020-03-07

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In the ECO10250 Assignment, we will discuss Economics for Decision Making. In this assignment, we have 5 questions and their scenario to explain this assignment, we also cover the Production Possibility Curve of the Nation, the Demand and Supply Schedule of ice cream, Scarcity, and many more.

Economics Name of the University Author Note

   

Southern Cross University

   

Economics For Decision Making (ECO10250)

   Added on 2020-03-07

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Running head: ECONOMICSEconomicsName of the StudentName of the UniversityAuthor note
Economics Name of the University Author Note_1
1ECONOMICSTable of ContentsAnswer 1..........................................................................................................................................2Answer 2..........................................................................................................................................4Answer 3..........................................................................................................................................6Answer 4..........................................................................................................................................8Answer 5..........................................................................................................................................9References......................................................................................................................................12
Economics Name of the University Author Note_2
2ECONOMICSAnswer 1a)Production Possibility Curve represents the maximum amount of output that can be producedusing all the resources of the nation. Given limited resources, in order to increase output of onecommodity the economy has to sacrifice some other commodity. Therefore, production of everycommodity involves sacrifice of some other commodity, which is called opportunity cost of thecommodity (Green 2015). The opportunity cot is generally increasing in nature. This explains theconcave shape of the Production Possibility Curve. The reason behind increasing opportunitycost is as the country uses more and more resources in production of one commodity the lessefficient it becomes. This is the reason why PPC is found to be flatter to its end point and bulgedin the middle.Figure 1: Production possibility Curve of a nation(Source: as created by Author)
Economics Name of the University Author Note_3
3ECONOMICSFigure 1 shows the PPC for a nation. In order production of good X from X’ to X’’, productionof some other goods namely Y must needs to be reduced from Y’ to Y’’.b) In economic terms, scarcity refers to inability of the limited resources to fulfill unlimitedwants. Scarcity as goes by its name not refers lack of something that can be fulfilled usingmoney or in exchange of something valuables. Rather it is a persistent problem in the economy.In order to make a decision people always faces a trade off in terms of sacrificing some otherchoices. The high paying job can solve Jane’s monetary problem but cannot get him red off theeconomic choice or trade off problem. Then problem will stay always stay in the economy untilthings become as completely free lunch. Therefore, it is not be the case that Jane will no longerface the problem of scarcity.c) Every economy has its own way of handling the problem of scarcity. The three foremostimportant question of the economy what to produce, how to produce and for whom to produceare answered in different way depending on the structure of the economy. For example in acommand-economy where government intervention is supposed to be the highest, governmenttakes the decisions about output and resource allocation. Government there allows t6heproduction of goods that satisfy the needs of most of the people in the economy. in a free marketeconomy government intervention is the least. Resources are left in the hands of free marketeconomy and forces of supply and demand ensure efficient production. An efficient form ofeconomy is c\some combination of these two called the mixed economy. Here free market forcesas well as government intervention work together depending on the economic situation.The economic structure of UK is very much similar to that of a mixed economy. For mostof the sectors in the economy, there is free market environment. Government intervenes only in
Economics Name of the University Author Note_4

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