timer Asked: Feb 4th, 2016

Question description

A-    Economics deals with economic choices (decisions) individuals, firms and nations make. The adage, "There is no such thing as a free lunch," is used to illustrate the principle that people face tradeoffs to make economic decisions.
  1. Why do economic agents need to make choices in the decision making process? What are the factors that force us to make choices among the viable alternatives at our disposal during a given period of time?
  2. Why do economic agents face tradeoff in our economic choices (economic decision making) process? How do we make a rational choice among the viable alternatives we have as individuals or business owners?

B-   The economy works via the interactions of economic agents (interactions of economic choices). Economists claim that pursuing self-interest based on our skills leads to trade based specialization and mutual gains from trade.

  1. Think of a recent purchasing decision in which you compared the marginal benefits associated with buying a product with the marginal costs. How do you make a rational decision by comparing marginal benefits and marginal costs?
  2. What is the role of self-interest in free market operations (economic choice interactions)? Why engagement in self-interest may lead to better welfare for the society?

Tutor Answer

(Top Tutor) Studypool Tutor
School: Carnegie Mellon University
Studypool has helped 1,244,100 students
flag Report DMCA
Similar Questions
Hot Questions
Related Tags

Brown University

1271 Tutors

California Institute of Technology

2131 Tutors

Carnegie Mellon University

982 Tutors

Columbia University

1256 Tutors

Dartmouth University

2113 Tutors

Emory University

2279 Tutors

Harvard University

599 Tutors

Massachusetts Institute of Technology

2319 Tutors

New York University

1645 Tutors

Notre Dam University

1911 Tutors

Oklahoma University

2122 Tutors

Pennsylvania State University

932 Tutors

Princeton University

1211 Tutors

Stanford University

983 Tutors

University of California

1282 Tutors

Oxford University

123 Tutors

Yale University

2325 Tutors