Answer to Question #141128 in Microeconomics for joelle chai

Question

reflect 4 econoomics concepts based on economic problem , nature and method

Answer 1

Economics focuses on how and why we make purchasing choices. The key concepts of economics include, scarcity, supply and demand, cost as well as incentives. Scarcity helps address economic problems, coming up with the argument that the world has scarce resources and people are to make decisions about how such resources should be efficient. Moreover, supply and demand explains nature of the market system. It helps explain why, for instance, last year's product is half in price this year as compared to a doubled price last year. As well as the possibility of its rise the following year. The concept of cost is also related to method, in that, it explains rational and choices of consumers. People try to maximize benefits as they minimize cost. Nonetheless, as economics assumes people are rational, the truth is that we make honest choices with the existing scarce resources