Morgan1234pooki
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Hi!! I've only just started economics but weve got an essay already!!
Can someone tell me if this is good or not?? Thanks!!!
Extended Response:
Describe the four key economic questions and explain how the choices of individuals, businesses and governments can influence these economic issues.
For a modern economy, the key economic and societal questions are; what to produce, how much to produce, how to produce and how to distribute production. The decisions made in relation to these criteria may govern whether the economy is stable or unstable and wether their production possibility frontier demonstrates whether they are utilising the entirety of their resources and labour. Also, if they are satisfying the greatest number of consumer and capital wants at any given point in time. Individuals, businesses and governments can also have a considerable influence upon these economic issues.
Within an economy the respective governments and manufacturers have a responsibility to answer the four key economic questions. The first issue is what to produce, this is usually determined by what the firms/governments believe people what to purchase and consume. It also involves ascertaining what wants should be satisfied, and which should remain unsatisfied. What to produce can also be heavily influenced by accounting profit, normal profit and economic profit. The second question is, how much to produce. In order to allocate limited resources efficiently (land, labor, capital, entrepreneurship) and maximise satisfaction through capitalising on available goods and services, economies will determine how much of each product to manufacture. Governments and companies will also consider factors to minimise costs in producing X units. It is essential that economies find a balance, otherwise resources will be wasted or individual wants will be unsatisfied. The third issue is how to produce. This decision determines how to allocate resources in the production process. It is fundamental the manufactures produce with technical efficiency and competency, meaning that we have to use the least-cost methods of production. For example, using $5 of resources to produce what could have been manufactured with $4 of resources is wasting the potential output that could have been utilised from the discarded resources. The final question is how to distribute production. After production, economies must decide on their distribution amongst the population. Individual income is a key factor in deciding how to distribute production. Subsequently, economies must decide whether to have equitable distribution or inequitable distribution. There is often a conflict of interest between equity and efficiency.
Individuals have a consequential influence on the economy and economic decisions. The economic decisions made by individuals are shaped by numerous factors, including age, income, family circumstances and expectations. This concept is further discussed by Israeli-born psychologist Prof. Daniel Kahneman who won the 2002 Nobel Prize for Economics, as “hedonic psychology”; the act of integrating physiological insights such as human well-being and meaning into economic decision making. Fundamentally, the key choices for individuals are what to spend and what to save. Issues such education, work, retirement, family and education play a substantial role in influencing these economic decisions. For instance, the choice to undertake further education opportunities may lead to higher income in the future, but presently, will restrict the individual’s ability to consume due to their limited income. Factors such as family and retirement may also have a critical impact on economic issues. For example, when starting a family, individuals will essentially have to restrict personal expenditure. Also, those who choose to retire will have to become accustomed to a lower income source and increased opportunities to consume. These choices will undoubtedly have an impact upon what to produce and, in particular, how to distribute production. As illustrated in these examples, individuals have an undeniably substantial influence on the four key economic issues.
Businesses primarily face decisions that relate to their business operations. Economic factors that influence these decisions include exchange rates, interest rates, unemployment, employment, income, inflation and possibly, recession and/or depression. The prices determined by businesses have the greatest repercussions on how much to produce, due to supply and demand. Businesses will generally seek to minimise their costs in every operational aspect, such as purchasing the available resources. This may even result in forsaking ethical issues such as the importance of the environment. For example, business will consider whether they are willing and/or able to pay a higher price for the use of recycled paper as opposed to non-recycled paper. Businesses also face choices in relation to how they manage industrial relations issues. For instance, whether they will encourage union representation or involvement from employees in company decision making. Consequently, businesses have a paramount role in determining how much to produce.
Governments have arguably the greatest influence upon the economic choices of business and individuals, as they determine the price of expenses such as cigarettes. By, heavily taxing these items, governments will influence the economic decisions of individuals in relation to what to save and what to spend. Subsequently, affecting the key economic issues of how much to produce and what to produce. In more extreme circumstances, governments will influence economic behaviours by prohibiting certain activities and imposing heaving penalties on illegalities. This act is referred to as behavioural economics. Equally, governments will attempt to encourage economic behaviours by providing incentives. For example, the Australian Federal government provides a 30% tax rebate for private health insurance payments, but imposes the Medicare Levy Surcharge on higher income earners who don’t have private health care insurance. Tax revenue and civil and political institutions will also affect economic growth and issues, subsequently maximising government economic benefits but also expanding their economic and political influence. The government’s economic interests will both directly and indirectly impact upon the key economic issues in addition to individual and business economic decisions.
In conclusion, the choices of individuals, businesses and governments have a significant influence upon the four key economic questions, what to produce, how to produce, how much to produce and how to distribute production.
Can someone tell me if this is good or not?? Thanks!!!
Extended Response:
Describe the four key economic questions and explain how the choices of individuals, businesses and governments can influence these economic issues.
For a modern economy, the key economic and societal questions are; what to produce, how much to produce, how to produce and how to distribute production. The decisions made in relation to these criteria may govern whether the economy is stable or unstable and wether their production possibility frontier demonstrates whether they are utilising the entirety of their resources and labour. Also, if they are satisfying the greatest number of consumer and capital wants at any given point in time. Individuals, businesses and governments can also have a considerable influence upon these economic issues.
Within an economy the respective governments and manufacturers have a responsibility to answer the four key economic questions. The first issue is what to produce, this is usually determined by what the firms/governments believe people what to purchase and consume. It also involves ascertaining what wants should be satisfied, and which should remain unsatisfied. What to produce can also be heavily influenced by accounting profit, normal profit and economic profit. The second question is, how much to produce. In order to allocate limited resources efficiently (land, labor, capital, entrepreneurship) and maximise satisfaction through capitalising on available goods and services, economies will determine how much of each product to manufacture. Governments and companies will also consider factors to minimise costs in producing X units. It is essential that economies find a balance, otherwise resources will be wasted or individual wants will be unsatisfied. The third issue is how to produce. This decision determines how to allocate resources in the production process. It is fundamental the manufactures produce with technical efficiency and competency, meaning that we have to use the least-cost methods of production. For example, using $5 of resources to produce what could have been manufactured with $4 of resources is wasting the potential output that could have been utilised from the discarded resources. The final question is how to distribute production. After production, economies must decide on their distribution amongst the population. Individual income is a key factor in deciding how to distribute production. Subsequently, economies must decide whether to have equitable distribution or inequitable distribution. There is often a conflict of interest between equity and efficiency.
Individuals have a consequential influence on the economy and economic decisions. The economic decisions made by individuals are shaped by numerous factors, including age, income, family circumstances and expectations. This concept is further discussed by Israeli-born psychologist Prof. Daniel Kahneman who won the 2002 Nobel Prize for Economics, as “hedonic psychology”; the act of integrating physiological insights such as human well-being and meaning into economic decision making. Fundamentally, the key choices for individuals are what to spend and what to save. Issues such education, work, retirement, family and education play a substantial role in influencing these economic decisions. For instance, the choice to undertake further education opportunities may lead to higher income in the future, but presently, will restrict the individual’s ability to consume due to their limited income. Factors such as family and retirement may also have a critical impact on economic issues. For example, when starting a family, individuals will essentially have to restrict personal expenditure. Also, those who choose to retire will have to become accustomed to a lower income source and increased opportunities to consume. These choices will undoubtedly have an impact upon what to produce and, in particular, how to distribute production. As illustrated in these examples, individuals have an undeniably substantial influence on the four key economic issues.
Businesses primarily face decisions that relate to their business operations. Economic factors that influence these decisions include exchange rates, interest rates, unemployment, employment, income, inflation and possibly, recession and/or depression. The prices determined by businesses have the greatest repercussions on how much to produce, due to supply and demand. Businesses will generally seek to minimise their costs in every operational aspect, such as purchasing the available resources. This may even result in forsaking ethical issues such as the importance of the environment. For example, business will consider whether they are willing and/or able to pay a higher price for the use of recycled paper as opposed to non-recycled paper. Businesses also face choices in relation to how they manage industrial relations issues. For instance, whether they will encourage union representation or involvement from employees in company decision making. Consequently, businesses have a paramount role in determining how much to produce.
Governments have arguably the greatest influence upon the economic choices of business and individuals, as they determine the price of expenses such as cigarettes. By, heavily taxing these items, governments will influence the economic decisions of individuals in relation to what to save and what to spend. Subsequently, affecting the key economic issues of how much to produce and what to produce. In more extreme circumstances, governments will influence economic behaviours by prohibiting certain activities and imposing heaving penalties on illegalities. This act is referred to as behavioural economics. Equally, governments will attempt to encourage economic behaviours by providing incentives. For example, the Australian Federal government provides a 30% tax rebate for private health insurance payments, but imposes the Medicare Levy Surcharge on higher income earners who don’t have private health care insurance. Tax revenue and civil and political institutions will also affect economic growth and issues, subsequently maximising government economic benefits but also expanding their economic and political influence. The government’s economic interests will both directly and indirectly impact upon the key economic issues in addition to individual and business economic decisions.
In conclusion, the choices of individuals, businesses and governments have a significant influence upon the four key economic questions, what to produce, how to produce, how much to produce and how to distribute production.