Economics Assignment with Essays and Answers - Desklib

This assignment includes essays and answers on market economy, command economy, scarcity, and price elasticity of demand. It covers the basic economic questions and four types of economic systems. The essay also explains the opportunity cost and determinants of price elasticity of demand.

Running head: ECONOMICS ASSIGNMENT
ECONOMICS ASSIGNMENT
Name of the Student
Name of the University
Author note

ECONOMICS ASSIGNMENT
ESSAY 1
Answer 1
I have four hours of human capital. There are two things that can be produced with the human
capital. Option 1 is to play dart and option 2 is to throw tennis ball. In one hour I can throw
200 tennis balls or 200 darts. Therefore, in four hours I can either throw 400 tennis balls or
400 darts. Playing more darts mans throwing less tennis balls.
9
0 400 x
ESSAY 2
Question#1
A market system is defined as the network of sellers, buyers as well as other actors in
the market that joins hands together with the aim of trading in a given service or a product.
The core or main actors in a market system encompass consumers, buyers, producers (all
these actors are generally referred to as direct market players). On the other hand, command
economy is defined as an economy where the state or the central government makes virtually
I am
here
Where I want
to be
Number of Darts
thrown
Number of tennis
ball thrown 400
Y

ECONOMICS ASSIGNMENT
all decisions associated with the economy. In other words, the state or the central government
determines the kind of services and products that should be generated or produced in a given
country.
ANSWER 2
The economic system where the production of services and goods are distributed
through the free market mechanism are called the market economy. On the other hand, in
case of command economy the factors of production are been controlled by the
government. .Command economy is also known as the planned economy1. In this kind of
economy all the factors of production like land, labour capital are owned by the government.
The three basic economic questions that needs to be answered are
 what are the goods and services that needs to be produced?
 How they can be produced
 For whom to produce?
The economic system of a country depends on how the three questions are handled by the
country. There are four type of economic systems in the world which comprises of
 mixed economy,
 traditional economy
 command economy
 and market economy.
Market economy is most commonly practised in United States2. These three
questions are therefore answered by the interaction which takes place between buyers
and sellers in the market. Therefore the question of what to produce depends on both
1 Haggard, Stephan, and Robert R. Kaufman. The political economy of democratic transitions. Princeton
University Press, 2018.
2 Becker, Gary S. Economic theory. Routledge, 2017

ECONOMICS ASSIGNMENT
buyers and sellers, the question for whom to produce is usually answered by the buyers
who states what they need and how to produce therefore depends completely on the
choice of buyers. On the other hand in case of command economy where the government
controls the market , he therefore answers the questions. The consumers are not given any
chance to answer what goods and services they need, the government only decides what
to produce , how to produce and for whom to produce. Therefore, surviving in this type of
economy is quite difficult for the citizens.
ANSWER 3
The situation when there is unlimited human wants compared to the availability of
fewer resources is termed as scarcity. It can be also defined as the gap between limited
resources and the wants of human beings which are limitless.
A shortage generally occurs when the quantity demanded exceeds the quantity
supplied3. Shortage is usually temporary man made unavailability on the other hand scarcity
refers to limited availability of resources and it is permanent .
The four economic resource categories are land, labour, capital and entrepreneurship.
The factors that are used to produce goods and for providing services are termed as economic
resources.
The limited resource that is land, labour , capital is related to scarcity as human wants
are limitless but the resource available is limited.
The next best alternative good that is given up to produce the a good is the
opportunity cost of the other good. The opportunity cost usually rises when there arises a
problem of scarcity of resources and the resources have alternative uses. In this way
3
Barnett, Harold J., and Chandler Morse. Scarcity and growth: The economics of natural resource availability.
RFF Press, 2013.

ECONOMICS ASSIGNMENT
opportunity cost is related to scarcity4. Therefore, when the resources are used in order to
produce one commodity, we need to forgo the production of some other commodity which
could have been produced with those resources.
Decisions that we make everyday involves opportunity cost. Most of the times the
decisions that we take are mutually exclusive that means we cannot have two things at once.
Therefore, in this case the opportunity cost plays a role. Here it is the opportunity cost of the
thing that we did not choose.
4 Becker, Gary S. Economic theory. Routledge, 2017.

ECONOMICS ASSIGNMENT
Question #4
The four determinants of the price elasticity of demand for a commodity encompass
complementary between goods, the number of utilization/uses of a commodity, the
proportion of the income of a consumer spent, and the availability of substitutes. One
example of availability of substitutes is that if a price of a given commodity skyrocket or goes
up, consumers or customers will move to its close substitutes. Consequently, the demand for
that commodity will dramatically or greatly reduce.

ECONOMICS ASSIGNMENT
REFERENCE LIST
Barnett, Harold J., and Chandler Morse. Scarcity and growth: The economics of natural
resource availability. RFF Press, 2013.
Becker, Gary S. Economic theory. Routledge, 2017.
Haggard, Stephan, and Robert R. Kaufman. The political economy of democratic transitions.
Princeton University Press, 2018.
.