Question

(3)Write short notes (3-4 sentences long) about the following concepts:

(3a)Tariffs

(3b)Poverty rate

(3c)Models

(3d)Positive economic analysis                           

(3e)Production

(3f)Scarcity

(3g)Assumptions

(3h)Deductive method of analysis

(3i)Economic system

Answer 1

Solving first 4 parts as per Chegg policy. Please post the rest separately. Thank you.

3a. Tariffs- Tariffs are a type of tax imposed by a company on a particular set of imports or imports from a particular country (like US tariffs on China). Tariffs help local producers but result in overall and local consumer surplus loss. They increase prices locally but are an important political tool.

3b. Poverty rate is the ratio of the number of people whose income falls below the poverty line. The poverty line is the minimum level of income deemed adequate in a particular country. Hence, it is clear that poverty lines are different for different countries. In 2014, 14.8% of US population lived below poverty line.

3c. An economic model is a simplified version of reality that allows us to observe, understand, and make predictions about economic behavior. We take complex economical problems from the real world and try to explain them based on ecnomic models. Models are often much simplified versions of realities and often keep many factors constant while understanding the impact of just a couple of factors.

3d. Positive economic analysis describes and explains various economic phenomena 'as is'. Poisitve economic analysis tries to explain the economic phenomena which exists in reality, right now. It is not concerned with that is best or what is ideal and should be, it is only concerned with what is. It relies on objective data analysis, relevant facts, and associated figures.