Essays on Fundamental Concepts that Define the Economic Way of Thinking Assignment

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The paper "Fundamental Concepts that Define the Economic Way of Thinking" is a great example of an assignment on macro and microeconomics. The concept of scarcity is an economic understanding in which the world has limited resources compared with the unlimited human wants. It refers to the insufficient productive resources that limit fulfilment of human needs and wants. Scarcity involves the requirement of tradeoffs so that an individual obtain more of a given scarce resource. The aspect of scarcity results in competition and pricing is one of the strategies use to control scarcity.

The concept of scarcity also affects the billions because of tradeoffs. For example, if a billionaire wants to undermine an economy, the individual will target specific investment resulting in the dollar appreciating by 10% and even though an individual is a billionaire, the individual will not have enough resources to undermine the dollar. Billionaires also participate in numerous charity organisations and activities, buy their contribution to the charity cannot accomplish the worthy causes. The third example is time constraints. The opportunity cost for a billionaire is higher compared with a normal individual.

For example, the hourly rate for a billionaire maybe $20 million, which results in a high opportunity cost when it comes to leisure related functions. b)Fundamental concepts that define the economic way of thinking In economics, numerous fundamental concepts define the way humans think. The aspect of scarcity and choice are common because of trade-off. For example, resources are scarce, but an individual has to make a choice in allocating the resources. Money and time are an example of scare resources that an individual has to make choices in determining the appropriate strategy.

For example, an individual may decide to allocate money to address to a problem arising from time constraints. The achievement of the goal involves some cost, and an individual should not consider costs only from the perspective of money but other valuable components. In thinking in economic terms, understanding the different variables is important in ensuring the right decision is made.

References

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Biofuels Association of Australia, What are biofuels? http://biofuelsassociation.com.au/biofuels/

Economic Research 2016, Primary Commodity Prices, Retrieved from https://research.stlouisfed.org/fred2/release?rid=365

Quiggin,J, 2010, Droughts, Climate Change and Food Prices in Australia, https://www.acfonline.org.au/sites/default/files/resources/Climate_change_and_food_ in_Australia.pdf

US Energy Information Administration (EIA), (2016), The prices of oil, Retrieved from http://www.eia.gov/petroleum/data.cfm#prices

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