Economic Principle

Running Head: ECONOMIC PRINCIPLE
Economic Principle
Name of the student:
Name of the University:
Author’s Note:

ECONOMIC PRINCIPLE1
Table of Contents
Answer: 1.........................................................................................................................................2
Answer: 2.........................................................................................................................................2
Answer: 3.........................................................................................................................................3
a)..................................................................................................................................................3
b)..................................................................................................................................................4
c)..................................................................................................................................................5
Answer:4..........................................................................................................................................5
Answer: 5.........................................................................................................................................6
Answer: 6.........................................................................................................................................7
Reference List..................................................................................................................................9

ECONOMIC PRINCIPLE2
Answer: 1
Opportunity cost is the amount of next best alternative as a person can do only one work
at a time. It is the cost that needs to be given up to get something which requires taking decision
among available choices. It is the value which is lost for choosing an alternative course of
activity and is estimated by the amount of cost and benefit acquired by choosing the alternative
(Cunha, Giorgi and Jayachandran 2018).
Recently, the opportunity cost is faced in taking a decision of joining college or getting a
job instead. Opportunity cost of going to college is the value of income that is lost in the years
for getting the degree which could have been earned by having a job and not going to college.
Going to college requires high fees and time. Job itself provides with an amount of salary. This
opportunity cost varies among people due to their taste and preference.
Answer: 2
The price of new trucks has decreased and yet the sale of new trucks has also decreased.
The law of demand says that as price a good goes down, the demand for the good goes up
showing an inverse relationship between price and quantity demanded. However, here the
relationship is direct making the demand curve to be upward sloping establishing the fact that
demand for trucks goes up when price goes up and vice-versa (Bakucs, Fałkowski and Ferto
2014).