Economic Concepts Essay Example | Topics and Well Written Essays - 1250 words

Economic Concepts - Essay Example Basically, "free trade" can be seen as exchanging least value (i.e. money, cash, credit, etc) for optimum services or goods. That is, on an individual's level, a person wishing to wash and iron her pants, for example, is going to send her pants to a laundry rather than wash a pair of pants herself (Blinder, n.d.). In economic speak, choosing to produce goods and services domestically or abroad implies - given free flow of goods, services, and human Pants, once more. An individual choosing to wash and iron her pants is opting for resources (e.g. time and physical energy) channeled into an activity in which resources might be utilized differently. That is, in terms of economic benefits costs involved to "purchase" goods or services are not limited to strict monetary value but extends to cover a wide range of implied costs ("Opportunity Cost," n.d.). The (economic) decision by individuals as well as states is one, consequently, limited by what options individuals and/or states choose in order to maximize utility of an (economic) activity. In economic parlance, "opportunity costs" is an investment in present as well as future opportunities for most efficient allocation of resources. Strategically, a state's economic decision to invest in... ecision by individuals as well as states is one, consequently, limited by what options individuals and/or states choose in order to maximize utility of an (economic) activity. In economic parlance, "opportunity costs" is an investment in present as well as future opportunities for most efficient allocation of resources. Strategically, a state's economic decision to invest in and master specific products, services, or industries is, in fact, an opportunity-costs option. A case in point is United State's investment in, say, computers vis--vis China's, say, focus on toys (Blinder). The concept of opportunity-costs is further nuanced, however. That economic activities exist for profit is a given. To realize profit such as to allocate resources most efficiently is basically weighing costs against benefits, which is ECONOMIC CONCEPTS 5 opportunity costs in essence. Yet, in order for an economic activity to achieve what is commonly known as "excess profit" - i.e. profit exceeding normal margins of profit in a given market - such an economic activity should meet a specific set of market supply and demand requirements ("Opportunity Cost"). This is more evident in (in)elastic products. Elasticity Necessity dictates consumers to add a product or service to or drop it off shopping carts. Consumers, put differently, choose to purchase a product or a service based on product's or service's necessity. Consequently, a product or a service is said to be "(un)elastic" if such a product or service is on low or high demand based on necessity. By default, A good or service is considered to be highly elastic if a slight change in price leads to a sharp change in the quantity demanded or supplied... On the other hand, an inelastic good or service is onein whichchanges in price witness