Question

* What is your understanding of the Economic Perspective and how do you use in your daily life....two paragraphs please, remembering that each paragraph is 7 to 8 sentences.

* Outline your understanding in 4 paragraphs about the following:

-Production Possibilities curve and what it is utilized for

-the All things being equal assumption

-the difference between Macro and Microeconomics and positive and normative economics

Answer 1

1) Economics affects our daily lives in both obvious approach and more subtle approches. From a perspective of individual, economics frames several choices we have to make about work, consumption, leisure, and how much to save. The daily lives are also influenced by broader economic trends, such as interest rates, inflation, and economic growth. These force have little control by us but can change our lives. Each choice has an opportunity cost. The opportunity cost can assist to make better decisions. We can make economic decisions with the intention of maximizing our return

This knowledge of evaluation can be learned in economics. It can be beneficial to examine the different choices whether you want to lend someone on high-interest rate, invest your money in a fixed deposit, buy land or gold, etc., and simultaneously the risk involved in them. Economists can speculate the future inflation or deflation a nation may face and thus finances can be planned accordingly. While buying something, economics help to evaluate the derived utility from it with each unit and the cost you are paying for it

2) The production possibility frontier (PPF) is a graph that depicts all maximum output possibilities for two goods that can be produced by an economy, given a set of inputs consisting of limited available resources. It is utilized to illustrate the concepts of trade-offs, opportunity cost, and also show the effects of economic growth. A nation would need an increase in the productivity, an increase in factor resources, or an improvement in technology to reach this combination.

The assumption of "ceteris paribus", in economics is derived from a Latin phrase which means "with other things the same" or "other things being equal or held constant," is vital in causation determination. It assists to isolate multiple independent variables affecting a dependent variable. It means that the economist in the model can hold all variables constant and can also tinker with them one at a time.

Macro economics analyses the economy as whole (which means aggregated production, savings, consumption, and investment) and diversified issues affecting it. For example, the United Nations Industrial Development Organization stated that more diversified economies will not be much volatile in terms of outputs, and lower output volatility is linked with higher economic growth. Micro economics analyses and examines the behaviour of basic elements in the economy, including individual agents (example, firms, buyers, households, and sellers) and markets, their interactions, and the interactions outcomes. For example The diversified government subsidies effect on prices of sugar would be examined and analysed by micro-economist.

Positive economic statements need not have to be correct, however must be able to be tested and proved or disproved. Conversely the normative economic statements are opinion based, thus need not to be proved or disproved