Economic Growth Essay

Name: Andy Chan Yin Loong
Student ID: 27439

Assessment 1
Group Presentations & Tutorial Participation
Management 302
Business Economics

The Economic Problem
Through the presentation, I have explained the 2 main topics which are the Economic problem and the demand and supply analysis. I have used graph to explain them and explained how we read the graphs.
Production Possibilities and Opportunity Cost
This will be explained as where with the amount of resources available and by the technology, we are only able to produce a limited amount of goods and services. With the graph on the power point, it will be explained where the production possibilities frontier is located, which is along the line.
Using Resources Efficiently
Through explaining this part, I have spoken about the equilibrium point for each graph. This is where we reach efficiency when we use the lowest cost and quantities to produce goods and services.
Marginal Cost is explained where the opportunity cost of producing another unit of it. Again explaining through the graph when moving along the production possibilities frontier (PPF) the marginal cost of an additional unit of good increases as more of it is being produced.
Preferences will be explained of which a person’s like and dislikes of a good or services. We can understand preferences with the use of the marginal benefit concept. The marginal benefit is calculated or measured as the maximum amount people will pay for another unit of it. But at the same time, the marginal benefit from additional units of a good will decrease as more of it is being consumed.
When the marginal benefit equals the marginal cost, this is where we are at efficiency, thus the equilibrium point.
Economic Growth
Economic growth happens when there is an increase of production. But this can happen an example where there is Technological change, there is development and better ways to produce the goods and services, growth in capital resources and capital accumulation.
There are 2 key factors that affect the economic growth: 1. The Economic growth will shift the PPF outwards. 2. Opportunity cost of Economic growth would depend on the decision on what is the consumption. 3. Countries that focuses more resources to capital accumulation and technological has chance of a better and positive change.
With the explanation from the power points, we will understand further of how the graph works.

Demand and Supply.
From the graphs which I have produce in the power points would explain further on how to understand the graphs, how to read it, and would give you an idea of demand and supply.
Demand
Demand is where the consumers plan to buy during a period at the particular price. The law of demand, is where other things remains the same, when the price is high, the lesser the quantity is demanded. This happens if because there are 2 effects which are the:
Substitution effect: Where people will start finding a substitution because the particular price of the good is high.

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