Business Economics Assignment
10 Pages2731 Words223 Views
Added on 2019-12-28
Business Economics Assignment
Added on 2019-12-28
ShareRelated Documents
BUSINESS ECONOMICS
TABLE OF CONTENTSINTRODUCTION...........................................................................................................................1SECTION 1......................................................................................................................................11. Scarcity...............................................................................................................................12. Circular Flow of Income....................................................................................................13. Price Elasticity of demand (PED).......................................................................................24. Concept of Utility...............................................................................................................45. Compatibility of Perfect Competition with Economies of Scale.......................................4SECTION – 2...................................................................................................................................51. Output Gaps........................................................................................................................52. Collusive Oligopoly............................................................................................................6CONCLUSION................................................................................................................................7REFERENCES................................................................................................................................8
INTRODUCTIONBusiness Economics has evolved to be a sub-science within the vast subject ofEconomics. It is predominantly concerned with economic issues faced by an enterprise andforms the basis of resource allocation in a business. In pursuance to the same the present studyshall provide a brief understanding of various concepts such as Scarcity of resources, Circularflow of income, price elasticity, output gaps and so on. SECTION 11. Scarcity of ResourcesA business environment makes use of various resources such as human, machinery,factories, inventory etc. The manner of utilization of each one of them is based on the premisethat a limited number of resources are available against the unlimited human needs. Hence, it isimperative to make an optimum utilization of such resources considering the opportunity costattached with each of them. Scarcity, also known as paucity, formulates to be the basic problem of economics as theavailable resources are scarce in comparison to the unlimited human wants (Godley and Lavoie,2012). Resources that are not scare and free of any cost, are known as Free Goods. For instanceair can be considered as a free good and the quintessential resources of money and time can beconsidered to the most insufficient in nature, in context of society as well as businesses.However, fresh air is no more available in abundance from the perspective that the industrialrevolution has resulted into poor quality of air in highly populated cities. Hence, arises the needof application of the techniques under economics for optimum utilization of available resources.The business units are required to make an economic choice between the options by determiningand comparing the opportunity cost attached with each of the alternatives (Olmstead, 2010).Therefore, paucity poses to be a fundamental economic problem in satisfying the unlimitedwants of humans as the production of resources is highly insufficient. 2. Circular Flow of IncomeIt is a neoclassical economic model illustrating the manner in which money flows in aneconomy. The model is based on the adage that 'Demand shall adjust in accordance to theSupply'. The current economy is monetary in nature and has devoid itself from the traditionalbarter system. Hence, money now acts as a medium of exchange and runs parallel to the flow of1
End of preview
Want to access all the pages? Upload your documents or become a member.
Related Documents
Business Economics of Iceland Ltd : Reportlg...
|14
|5020
|140
Concept of Circular Economylg...
|3
|531
|361
Microeconomics - Study of Scarcity, Demand, Supply, Opportunity Cost and Price Elasticitylg...
|3
|607
|399
Assignment on Business and Economic Decisionslg...
|8
|1839
|107
Economics for Business: Impact of Macroeconomic Indicators on UK Businesseslg...
|12
|2649
|303
Analysis of Micro Economic Conceptlg...
|8
|2165
|382