The Principles of Economics Questions example

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The Principles of Economics Questions

Q1

The economic principles can best be merged to foster the growth of Gross National Product in a country in a year by Specialization, which is considered to be the key to economic efficiency based on theoretical and empirical considerations. For example, different nations may have various opportunity costs of production, example, from differences in stocks of human capital per worker or capital/labor ratios. According to theory, this may give a comparative advantage to the production of goods that make intensive use of the relatively abundant, thus relatively cheaper, input and hence more affordable. Even if one region has an absolute advantage as to the ratio of its outputs to inputs in every type of production, it may still focus on the output in which it has a comparative advantage and hence gain from trading with a region that lacks any absolute power but has a comparative advantage in producing something else. In the process, an aggregate output may increase as a by-product design, Such specialization of production brings out opportunities for gains from exchange whereby those who own the resources benefit from the exchange in the sale of a type of output for other, more valued goods. A measure of gains from trade is the increased income levels that trade may facilitate and a rise in the Gross National Product.

Q2

As the Board Director, I will authorize the marketing managers to use the following methods and techniques to forecast sales of the automobile for 2017; Qualitative forecasting techniques, where they will use the judgment of experts in the respective field to generate estimates. A principal advantage of these procedures is that they can be applied in our institution whether the historical data is naturally available or not. The three essential qualitative forecasting methods which are will be used include; the Delphi technique, scenario writing, and the open approach. Quantitative forecasting methodQuantitative forecasting methods will be utilized on historical data on variables of interest that are available; this method will be based on an analysis of historical data concerning the time series of the particular variable of interest and possibly other related time series. Quantitative forecasting methods will include; Time series method and Smoothing methodCausal method Causal methods will be the cause-and-effect relationship between the variable whose future is to be forecasted and other related variables or factors. The most commonly known causal method is called regression analysis, a statistical technique used to develop a mathematical model depicting how a set of variables that are related. Thus, this method will provide accurate information on future sales since figures give almost precise information.

Q3

I, as Mack Donald, will assume that I will be dealing with the rational consumer with an aim to maximize his or her total utility by purchasing a combination of different products rather than more of one particular product. …

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