Economics is not something limited only to big corporate and government institutions. In one way or another, the laws of this subject rule every household, whether one knows it them or not. That’s why students dreaming to become a money manager, or aiming for better financial management at home, should take their economics assignment seriously. But for that to happen, it’s important that you are friendly with some basic concepts of this subject. Which, for the beginners, are 5 in number to start with. These concepts are fundamental to every economic policy ever made, and will act to be the same until the existence of this science.
So let us have a look at five basic concepts of economics that every student of this field should be thorough in. If you are having a hard in coping with an assignment that deals with these concepts, then you can look for an online economics assignment help service that explains them in detail.
Scarcity is the limited availability of a resource that has to be produced to satisfy our unlimited needs. Scarcity is the reason why air is treated inferior to gasoline. Even though both are natural resources, the latter’s one is exponentially expensive than the former one because it’s an exhaustible natural resource. That means it a scarce resource and hence of value. Understanding the concept of scarcity can help you understand how the value of a commodity is decided.
Cost vs Price vs Value
Though the three sound similar, they are somewhat different from one another, and these differences make up for the core of any local, national, or international market. Cost is how much you have spent for the production of any particular product. Price is the amount that one has to pay for purchasing that very product. Value is the return one gets or hopes to receive, from buying that product. Value of a product varies from a person to person, and that’s why bargaining takes place to bring down the price.
Wealth vs Capital
Wealth refers to your assets, that include your land, shares, bonds, companies, jewel and antique collection, your automobiles, etc. Capital is basically the resources that you can reinvest in order to create more wealth. Using “Capital” interchangeably with “Cash” is more relevant than using it for “Wealth”.
Demand and Supply
Demand and Supply is one of the most basic and important concepts of Economics and is closely intertwined with other concepts like Value and price, and Scarcity. Demand is how many people want a particular good or service. In contrast, the supply of that particular good or service is the rate at which that demand is met. This concept is very much used to create black markets. Traders sometimes pick up a certain good in very high quantity when it’s in huge supply, and withhold it until it becomes scarce in the market. Then they release it on higher prices. Understanding D&S is important for doing your economics assignment properly.
Incentives play an important role in increasing the productivity of an organization or any work-group. They are of two types: Intrinsic and Extrinsic. Extrinsic incentives are external factors, like promotion or money, that motivate an employee or individual to perform better. While intrinsic incentives are internal factors, like job satisfaction, that urges a person to do better at a job.