Micro-economics is management of the scarce resources for the greater benefit of society.
Any opportunity available has a Opportunity Cost which is the cost of the next best alternative available that was passed over.
In a sequence of decisions Net Marginal Benefit Principle allows to choose the next best alternative choice given the associated opportunity cost with each decision.
The Invisible Hand Principle lets the society move towards making efficient decision as individuals make decision which maximizes their profits.
Trade allows people to exchange things and maximize their overall benefit.
Example :
I need to manage my time (scarce resource) across multiple courses that I am doing (Invisible hand principle to educate oneself for better life) . Among the 20 odd courses I am taking simultaneously, I see that I would have to Trade some of my personal tasks to get more time that I can allocate to studies. Still, I cannot manage all the courses and have to choose only 10 courses based on their Opportunity Cost. And among these 10 courses activities (lectures, quizzes, assignments, readings, projects) I would have to choose activities based on their Net Marginal Benefit.
Any opportunity available has a Opportunity Cost which is the cost of the next best alternative available that was passed over.
In a sequence of decisions Net Marginal Benefit Principle allows to choose the next best alternative choice given the associated opportunity cost with each decision.
The Invisible Hand Principle lets the society move towards making efficient decision as individuals make decision which maximizes their profits.
Trade allows people to exchange things and maximize their overall benefit.
Example :
I need to manage my time (scarce resource) across multiple courses that I am doing (Invisible hand principle to educate oneself for better life) . Among the 20 odd courses I am taking simultaneously, I see that I would have to Trade some of my personal tasks to get more time that I can allocate to studies. Still, I cannot manage all the courses and have to choose only 10 courses based on their Opportunity Cost. And among these 10 courses activities (lectures, quizzes, assignments, readings, projects) I would have to choose activities based on their Net Marginal Benefit.
No comments:
Post a Comment