How to Make Economic Decisions

Topics: Economics, Planned economy, Mixed economy Pages: 3 (1845 words) Published: October 27, 2014

How People Make Economic Decisions
Shamakio Royal
ECO/212
Apri1 24, 2014
Dr. Kofi AmoatengUniversity of Phoenix
How People Make Economic Decisions
In economics there are four main principles that individuals use to make economic decisions. The four main principles that will be discussed are Trade-offs, Opportunity Costs, Marginal Changes, and Incentives. There will also be an illustration of a conclusion made in comparison with marginal costs and marginal benefits related to that final resolution. The marginal costs and marginal benefits that were utilized in making that decision will also be explained as well as, the incentives that could lead an individual into making a dissimilar conclusion. Also, a clarification of how the principles of economics relate to decision-making and the mechanisms of the financial system as a whole. The main attributes of the economic systems are briefly discussed as the following, “the market economy, the centrally planned economy, and the mixed economy.” In conclusion, a clarification of what financial communications is affected by the type of economic system used today.

Principles of Economics
Economics is a brief description of the involvement of people and the interaction with other individuals in regards to the decisions he or she decides. The economy is observed by how it works as a whole, the people that make up the economy and how he or she interacts with other individuals. The four main principles of economics individuals use are Trade-offs, Opportunity Costs, Marginal Changes, and Incentives CITATION Pri13 \l 1033 (Principles of Decision Making, 2013). Trade-offs

Although economic goods and services are considered to be limited, this will not be good enough to satisfy the needs of others. Individuals should make a decision based on how to utilize the limitations of goods and services and to distribute these resources accordingly. In other words, individuals should give up the things that he or she wants, for...

References: BIBLIOGRAPHY Amadeo, K. (2014). Market Economy. Retrieved 4 23, 2014, from About.com: http://useconomy.about.com/od/US-Economy-Theory/a/Market-Economy.htm
Central Planning Economy . (2014). Retrieved 4 23, 2014, from economicshelp.org: http://www.economicshelp.org/blog/glossary/central-planning/
Economic Systems. (2014). Retrieved 4 23, 2014, from shmoop.cpm: http://www.shmoop.com/economic-systems/
Merritt, C. (2014). What Is the Difference Between Marginal Benefits & Marginal Cost? Retrieved 4 23, 2014, from smallbusiness.chron.com/: http://smallbusiness.chron.com/difference-between-marginal-benefits-marginal-cost-67686.html
Mixed Economy. (2014). Retrieved 4 23, 2914, from boundless.com: https://www.boundless.com/business/economics-and-business/businesses-under-mixed-economic-systems/mixed-economies/
Principles of Decision Making. (2013). Retrieved 4 23, 2014, from Principles of Economics: http://depts.alverno.edu/dgp/GEC/Principles%20of%20Economics.html
Continue Reading

Please join StudyMode to read the full document

You May Also Find These Documents Helpful

  • How Do people make economic decisions Essay
  • How People Make Economic Decision Essay
  • How People Make Economic Decisions Essay
  • How to make better decisions Essay
  • How People Make Economic Decisions Essay
  • How People Make Economic Decisions Essay
  • How People Make Economic Decisions Paper
  • How People Make Economic Decisions Essay

Become a StudyMode Member

Sign Up - It's Free