
Macroeconomics
5th Edition
ISBN: 9781319098759
Author: Paul Krugman, Robin Wells
Publisher: Worth Publishers
expand_more
expand_more
format_list_bulleted
Question
Chapter 1, Problem 1P
To determine
The principles used in the given case.
Concept Introduction:
Principles of Individual Choice:
- “Choice is necessary because resources are scarce”- Resources are always scarce in respect to its use, a single resource can be put to various alternative uses. Therefore, one has to choose between the various uses.
- “The true cost of something is its
opportunity cost ”- The value of any commodity is derived from the forgone cost to get that particular commodity. - “How much is the decision at the margin”- The choice of having something depends on the benefits one receive from that choice.
- “People usually exploit opportunities to make them better off”- People are always fond of alternative incentive, which can make them in better situation as compared to the previous situation.
- “
Gains from trade ”- Individual always gain from trade by selling the product in which they are specialized and purchasing the product in which they are comparatively less specialized. - “Market moves towards equilibrium”- Market always tries to settle down at a point where no individual is comparatively better off in changing his choice.
- “Resources should be used efficiently to achieve society’s goals”- Resources should be used in such a way that will not make any better off by making the other individual worse off.
- “Markets usually lead to efficiency”- People always look for the opportunity, which can make them better off without making any other person worse off, this leads to
efficiency in the market. - “When markets don’t achieve efficiency, government intervention can improve society’s welfare”- Government intervention is required when the market do not correct itself.
- “One person’s spending is another person’s income”- The economy will always go on because a person earns only when the other person spends.
- “Overall spending sometimes gets out of line with the economy’s productive capacity”- The economy can face inflation at the time when spending of whole economy raises all together.
- “Government policies can change spending”- Various fiscal and
monetary policies of government are used to correct the situation of the economy and adjust the spending.
Expert Solution & Answer

Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
how opportunity coast relate to Economics ?
which article about commond Economic and hor it relate to Principle of Economics?
which one article about utility in an Economics and how this article relate to principle of Economics?
Knowledge Booster
Similar questions
- How Command Economics Relate to Principle Of Economics?arrow_forwardhow commond economies relate to principle Of Economics ?arrow_forwardCritically analyse the five (5) characteristics of Ubuntu and provide examples of how they apply to the National Health Insurance (NHI) in South Africa.arrow_forward
- Critically analyse the five (5) characteristics of Ubuntu and provide examples of how they apply to the National Health Insurance (NHI) in South Africa.arrow_forwardOutline the nine (9) consumer rights as specified in the Consumer Rights Act in South Africa.arrow_forwardIn what ways could you show the attractiveness of Philippines in the form of videos/campaigns to foreign investors? Cite 10 examples.arrow_forward
- Explain the following terms and provide an example for each term: • Corruption • Fraud • Briberyarrow_forwardIn what ways could you show the attractiveness of a country in the form of videos/campaigns?arrow_forwardWith the VBS scenario in mind, debate with your own words the view that stakeholders are the primary reason why business ethics must be implemented.arrow_forward
- The unethical decisions taken by the VBS management affected the lives of many of their clients who trusted their business and services You are appointed as an ethics officer at Tyme Bank. Advise the management regarding the role of legislation in South Africa in providing the legal framework for business operations.arrow_forwardTyme Bank is a developing bank in South Africa and could potentially encounter challenges similar to those faced by VBS in the future. Explain five (5) benefits of applying business ethics at Tyme Bank to prevent similar ethical scandals.arrow_forward1.3. Explain the five (5) ethical challenges that can be associated with the implementation of the National Health Insurance (NHI) in South Africa.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Principles of Economics (12th Edition)EconomicsISBN:9780134078779Author:Karl E. Case, Ray C. Fair, Sharon E. OsterPublisher:PEARSONEngineering Economy (17th Edition)EconomicsISBN:9780134870069Author:William G. Sullivan, Elin M. Wicks, C. Patrick KoellingPublisher:PEARSON
- Principles of Economics (MindTap Course List)EconomicsISBN:9781305585126Author:N. Gregory MankiwPublisher:Cengage LearningManagerial Economics: A Problem Solving ApproachEconomicsISBN:9781337106665Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike ShorPublisher:Cengage LearningManagerial Economics & Business Strategy (Mcgraw-...EconomicsISBN:9781259290619Author:Michael Baye, Jeff PrincePublisher:McGraw-Hill Education


Principles of Economics (12th Edition)
Economics
ISBN:9780134078779
Author:Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:PEARSON

Engineering Economy (17th Edition)
Economics
ISBN:9780134870069
Author:William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:PEARSON

Principles of Economics (MindTap Course List)
Economics
ISBN:9781305585126
Author:N. Gregory Mankiw
Publisher:Cengage Learning

Managerial Economics: A Problem Solving Approach
Economics
ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Cengage Learning

Managerial Economics & Business Strategy (Mcgraw-...
Economics
ISBN:9781259290619
Author:Michael Baye, Jeff Prince
Publisher:McGraw-Hill Education