Essay on Principles of Economics - 617 Words

Principles of Economics Paper Individual decision making is either you do, or you do not. Most people are rational beings basing their decisions on a formula, benefits versus cost. Are the benefits of buying a $1000 television worth it? Are the marginal benefits worth the marginal cost? Just this morning, I was faced with such a scenario. I was invited over to a friend’s house to try a new video game. I did not go, however, because I knew that I had to read several chapters for my class and write a paper. The benefits were that I would have some time to hang out with my friends and enjoy some much needed free time. The cost would’ve been that I could have not gotten all of my reading done and possibly been late on my†¦show more content†¦Centrally planned economies are of a lower caliber quality, because the government decides who, what, and how products will be handled. This however does not meet the consumers wants, only the needs. Market economies are quite different from centrally planned. Market economies base their who, what, and how answers on the consumers. This gives the consumers more choice and power on their buying habits. In a market economy, products will tend to have higher quality and higher probability of satisfying the consumers. This does, however, target the more willing and capable buyers. There is a third economic system that was brought about in the nineteenth century: a mixed economy. This mixed economy is a combination of both centrally planned and market economies. This allows for the answers to â€Å"who, what, and how?† to be decided by consumers but in which the government has a significant role in the allocation of resources. Simply explained, social interactions change from one economic system to another. A centrally planned economy restricts free will as far as the questions who, what, and how. Perhaps leaving the society a little less satiated. A market economy will allow for higher paying jobs, better quality products, but targets only a certain demographic. A mixed economy attempts to combine both systems and allow for high quality products, high paying jobsShow MoreRelatedThe Principles of Economics1081 Words   |  4 Pagesï » ¿Running Head: PRINCIPLES OF ECONOMICS Alcohol abuse: A costly lifestyle Economic analysis states that alcohol abuse is a costly lifestyle. Alcohol consumption is approximated to cost individuals and the society billions of money indirectly or directly. The expenditures can be sub-divided down to include those costs that are added directly to the purchasing of alcohol and those which are incurred as a result of alcohol related health problems like liver cirrhosis (Coate, 2001). Reducing alcoholRead MoreThe Economic Principles2034 Words   |  8 PagesEconomic Principles For an economy to thrive it must spend money. The amount of money that is spent can vary greatly from one year to the next. 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However, throughout the years economists have developed some simple but widely applicable principles that are useful when trying to understand decisions that are made by everyday people to the workings of highly complex markets. There