Micro-economics exam techniques

Question 1

Economic Problem Arguments points

Answer 1

Inequality as there is a high percentage of waste so if that was distributed properly around the economy it would reduce the issue of scarcity as less is actually wasted and more is going back into the economy.

Environmentalist would want to preserve the earth and prohibit the use of unsustainable resources and instead of focus on maximizing the economic growth they should find another way to grow like using more renewable resources. i.e. wind energy, solar power etc.

Question 2

Opportunity Cost Arguments

Answer 2

Relevant to the Case or the Question. Factors of Production if there is an increase in capital investments then another factor of production will have a higher opportunity cost like labour as they cant spend as much money on employee satisfaction therefore such a thing could demotivate them potentially causing a dip in productivity

Question 3

Behavioural economics arguments

Answer 3

Make an assumption that people act on self interest. Could link this to negative externalities in the demerit goods. This is because private benefit is above the social benefits. This could further explore market failure to add in government spending to reduce the overconsumption off the d