Essays on Principles of Economics Assignment

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The paper "Principles of Economics" is a wonderful example of an assignment on macro and microeconomics. The production possibility frontier is a curve that shows the production trade-off in an economy or organization where the resources are fixed. This is common when an organization is producing two different types of products. The curve plays an important role in terms of indicating the maximal output that can be produced using fixed resources when dealing with two different types of products (Taussig, 2013). The production possibility curve below indicates that the production of mobile phones and cameras that the business intends to produce. Production possibility curve The curve can also be used for the purposes of indicating the efficient as well as the inefficient points of production.

According to the curve, the efficient point has been marked A and B. At point A, 8 mobile phones and 10 cameras can be produced. At point B 7 mobile phones and 20 cameras can be produced. The points are efficient since the increase in the production of one good leads to a decrease in the production of the other.

In a production possibility curve, any point that lies on the production possibility curve is considered efficient (Laibson & List, 2015). However, an inefficient point lies in the left and the existing resources allow for the production of more or at least one product without scarifying the other. Increasing the production of cameras leads to a decrease in the production of mobile phones. This means that the resources for the production of mobile phones will have to be sacrificed in order to increase the production of the cameras. Scarifying the production of mobile phones in order to produce more cameras is the opportunity cost.

This can be highlighted at point C where only 3 mobile phones have to be produced in order to ensure that 30 cameras are produced. In economics, the opportunity cost is considered the foregone cist in order to produce another product (Marshall, 2013). The marginal analysis in economics is considered as the process of making the economic decision to produce. According to the marginal analysis, it is better to produce more cameras as compared to mobile phones.

This can be attributed to the ease of production as well as the cost involved in the production process. The possibility of the cameras to be sold within a short period of time and contributing to higher profitability is also much higher as compared to that of the mobile phone.

References

Taussig, F. W., 2013. Principles of economics (Vol. 2). Cosimo, Inc.

Laibson, D. and List, J.A., 2015. Principles of (behavioral) economics. American Economic Review, 105(5), pp.385-90.

Marshall, A., 2013. Industrial organization, continued. The concentration of specialized industries in particular localities. In Principles of economics (pp. 222-231). Palgrave Macmillan UK.

Colander, D., 2016. Tools, Not Rules: Are We Teaching the Wrong Principles of Economics in the Introductory Course & quest. Eastern Economic Journal, 42(2), pp.163-168.

Cosgrove, S.B. and Olitsky, N.H., 2015. Knowledge retention, student learning, and blended course work: Evidence from principles of economics courses. Southern Economic Journal, 82(2), pp.556-579.

Baumol, W. and Blinder, A., 2015. Microeconomics: Principles and policy. Cengage Learning.

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