ECS2606 Assignment 1 Semester 1 2023 Questions and Answer {Distinction Level}

Economic Efficiency - -is about using resources wisely. An outcome is said to be ..... if all resources are put to their highest value use, or equivalently, the economy reaches a desired outcome using the fewest resources. -Equity - -Concern about public policy or other economic decision affects people with different levels of income or other distinguishing characteristics (e.g. geographic location, household size): examining who gets the benefits and who pays the costs. -Economic Efficiency - -Occurs when the economy's recourses are allocated to their best use; an equilibrium is reached in which the marginal benefits or an activity equal the marginal costs (e.g. supply and demand, or the marginal benefits equal marginal damages) -Trade- offs - -The alternatives individuals, firms, and society face; for example, whether to chose one good or input or another, whether to visit a park or got to a movie. -scarcity - -Not having enough of something relative to one's wants; the limits to what the natural environment can provide -Opportunity Cost - -A fundamental concept in economics. The opportunity cost of using resources (land, labour, capital, natural resources) in a particular way is the highest valued alternative use to which those resources might have been put and thus which society forgoes by using the resources in the specified way. -Marginal Benefits - -The incremental benefits (in dollar terms) of increasing some good or service by one unit. They are also the derivative of a total benefit function.