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Admas University Eco101 PDF

The document discusses several economic concepts: 1) It defines opportunity cost as the value of the next best alternative use of a resource when making a choice between alternatives. 2) It describes the scientific method used in economics of observing behavior, formulating hypotheses, testing hypotheses through comparison to outcomes, and modifying or accepting the hypotheses. 3) It defines economic resources as the factors of production (land, labor, capital, entrepreneurship) used to produce goods and services. The document also provides an example of a production possibilities curve illustrating opportunity costs and discusses how utility refers to the satisfaction obtained from consuming goods and services.

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303 views2 pages

Admas University Eco101 PDF

The document discusses several economic concepts: 1) It defines opportunity cost as the value of the next best alternative use of a resource when making a choice between alternatives. 2) It describes the scientific method used in economics of observing behavior, formulating hypotheses, testing hypotheses through comparison to outcomes, and modifying or accepting the hypotheses. 3) It defines economic resources as the factors of production (land, labor, capital, entrepreneurship) used to produce goods and services. The document also provides an example of a production possibilities curve illustrating opportunity costs and discusses how utility refers to the satisfaction obtained from consuming goods and services.

Uploaded by

hussein
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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Adams

University , Hargeisa

Economic assignment
Name: Hussein Mahmoud Sead ID:8806

1-Opportunity cost is a benefit, profit, or value of something that must be
given up to acquires or achieve something else. When economists refer to the
“opportunity cost” of a resources, they mean the value of the next highest
valued alternative use of that resources. If for example you spend time and
money going to a movie, you can’t spend that time at home reading book, and
you can’t spend the money in something else.

2- Observing real-world behavior and outcomes. 


Based on those observations, formulating a possible 


explanation of cause and effect (hypothesis).

Testing this explanation by comparing the outcomes of specific events to the


outcome predicted by the hypothesis. 


Accepting, rejecting, and modifying the hypothesis, based on these


comparisons. 


Continuing to test the hypothesis against the facts. As favorable results


accumulate, the hypothesis evolves into a theory. A very well-tested and
widely accepted theory is referred to as an economic law or an economic
principle—a statement about economic behavior or the economy that enables
prediction of the probable effects of certain actions. Combinations of such
laws or principles are incorporated into models, which are simplified
representations of how something works, such as a market or segment of the
economy. 



3-The economic resources are the input, or factors of production, used to
produce the goods and service that humans want. Resources are divided into
four categories :1) Land: All natural resources 2) Labor: human effort 3)
Capital: Physical capital 4) Entrepreneurial: The talent. Economic resources are
also called factors of production because they are used to produce goods and
services. They are called inputs because they go in to a production process
with the resulting goods and services also being referred to as output
4-
(a) See curve EDCBA. The assumptions are full employment, fixed
supplies of resources, fixed technology and two goods.

Forklifts

(b) The opportunity cost of one more automobile is 9/2 = 4.5 forklifts. The
opportunity cost of one more forklift is 2/6 = 1/3 or .33 automobiles, as
determined from the table. Increasing opportunity costs are reflected in
the concave-from-the-origin shape of the curve. This means the
economy must give up larger and larger amounts of rockets to get
constant added amounts of automobiles—and vice versa.
(c) The economy is underutilizing its available resources. The assumption
of full employment has been violated.
(d) Production outside the curve cannot occur (consumption outside the
curve could occur through foreign trade). To produce beyond the
current production possibilities, curve this economy must realize an
increase in its available resources and/or technology

5-Utilty is the pleasure, happiness, or satisfaction obtained from


consuming a good or service. Because an individual act “rationally”
self-interest and seeking to maximize utility and that related to
purposeful behavior

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