Question

What economic principle is related to each economic concept? Discuss the principle, and recall or narrate a personal encounter/experience to support this principle.

a. Supply and Demand: The principle of supply and demand dictates that prices and quantities are determined by the interaction of supply (the amount of a product available) and demand (the desire for that product). For example, I once witnessed a surge in the price of bottled water during a heatwave when demand soared and supply couldn't keep up. This exemplifies how scarcity and increased demand drive prices up.
b. Opportunity Cost: Opportunity cost refers to the value of the next best alternative foregone when a choice is made. I recall a personal experience of choosing between working overtime and spending time with family. I chose overtime, but I felt the opportunity cost in terms of missing out on family time.
c. Comparative Advantage: Comparative advantage is the ability of one entity to produce a good or service at a lower opportunity cost than another. I once worked in a team where each member had different skills. By specializing in our areas of expertise, we improved efficiency and productivity, demonstrating the concept of comparative advantage.
d. Marginal Utility: Marginal utility is the additional satisfaction gained from consuming one more unit of a good. I can relate this to the experience of eating my favorite dessert. The first bite was incredibly satisfying, but with each additional bite, the marginal utility decreased, eventually reaching a point where I was no longer as satisfied.

Answer 1

The economic principles related to the economic concepts of supply and demand, opportunity cost, comparative advantage, and marginal utility.

Step-by-step explanation:

The economic principle related to the economic concept of supply and demand is the principle of supply and demand. This principle states that prices and quantities are determined by the interaction of supply (the amount of a product available) and demand (the desire for that product). For example, during a heatwave, the price of bottled water may surge due to increased demand and limited supply, illustrating how scarcity and increased demand drive prices up.

The economic principle related to the economic concept of opportunity cost is the opportunity cost principle. This principle refers to the value of the next best alternative foregone when a choice is made. For instance, if a person decides to work overtime instead of spending time with their family, the opportunity cost is the missed opportunity for family time.

The economic principle related to the economic concept of comparative advantage is the comparative advantage principle. This principle highlights the ability of one entity to produce a good or service at a lower opportunity cost than another. In a team scenario, if each member specializes in their area of expertise, it improves efficiency and productivity, exemplifying the concept of comparative advantage.

The economic principle related to the economic concept of marginal utility is the marginal utility principle. This principle refers to the additional satisfaction gained from consuming one more unit of a good. For example, when eating a favorite dessert, the initial bite may be incredibly satisfying, but with each additional bite, the marginal utility decreases, eventually reaching a point where satisfaction diminishes.