Economic Goals

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The planet Earth only has a certain amount of non-renewable natural resources, one of an economist's goals is to find the perfect way to allocate and manage these perfectly.

An Economist's goal is to find ways to make the economy healthier, that means bigger and better. Some of the problems that economists deal with include: humans have unlimited wants, so if we give someone everything they want today they will still want someone more tomorrow; the world has a scare amount of resources, there are not an infinate amount of labor force to build things or capital to fund or help produce certain goods.

Because of this economists aim to improve target aspects of the economy. They try to ensure that an economy is allocatively efficient and productively efficient. In order to be productively efficient everyone that is part of the system must be working as hard as possible to produce as much as possible, anything less (unemployment) and the economy is not being as efficient as possible. Economists also aim for the effective use of resources, since not all resources are equally suited for work in different departments (a canopener can open cans better then it can mash spinich). Since simply producing one good is never the best dicision economies must also try to produce not only WHAT a society wants but exactly HOW MUCH of different goods the society needs. Any more is a waste and any less is not enough, this is an example of allocative efficiency.

Practice Problem:

Ecomists have which of the following in mind:
(a) Economic Growth
(b) Allocative Efficiency
(c) Money
(d) Limited Human Wants
(e) Scarcity of Resources
(f) a,b & e.

Answer to Practice Problem - F - 5 points