Carefully review the following economic concepts and make sure you have a clear understanding of them: Neoclassical
Question:
Carefully review the following economic concepts and make sure you have a clear understanding of them:
Neoclassical economics, absolute scarcity, relative scarcity, natural capital, human-made Capital, factors substitution, technical advance, an economy, households, a firm, product and factor markets, utility, environmental amenities, and intrinsic value.
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Sure lets break down these economic concepts one by one 1 Neoclassical economics This is a traditional approach to economics which focuses on the determination of goods outputs and income distributions in markets through supply and demand It observes the economy as existing in equilibrium ie supply equals demand and changes in equilibrium as responding to the forces of supply and demand 2 Absolute scarcity This refers to the complete absence of a resource or the total amount of resources being less than the demand for it 3 Relative scarcity Relative scarcity on the other hand is the comparison of the scarcity of one good resource or commodity with all others It occurs when there is a need to choose the allocation of resources because the resources available are not enough to satisfy all wants and needs 4 Natural capital This refers to the worlds stocks of natural assets which include geology soil air water and all living things It is from this Natural Capital that humans derive a wide range of services such as the production of food and water the control of climate and disease and the nutrients cycles and crop pollination 5 Humanmade Capital Also known as manufactured capital it comprises all the physical goods and infrastructure that aid in the production process It includes factories machines and roads 6 Factors substitution Factor substitution refers to the ability of firms to substitute between different factors of production such as labor land and capital For example a firm may replace labor with machines a form of capital as a response to an increase in wages 7 Technical advance This refers to improvements in knowledge and technology that allow the same inputs to produce more outputs It contributes to economic growth by increasing productivity 8 An economy An economy is a system of production distribution ...View the full answer
Answered By
Shristi Singh
A freshman year metallurgy and material science student in India.
2+ Reviews
10+ Question Solved
Related Book For 
Principles Of Environmental Economics And Sustainability
ISBN: 9780415676915
3rd Edition
Authors: Ahmed Hussen
Question Posted:
