Namibia Regional Economics: FIN-111
Question one particular
a) Option and sunk cost
Opportunity cost is the value of the next greatest alternative that needs to be sacrificed as you make a choice and it is applicable everywhere.
One example is:
If a person decides to use getaway time to travel and leisure rather than to complete renovations around the house. Thus, the opportunity cost of the travel could be considered the forgone home restorations.
Sunk costs are costs that were incurred in the past and cannot be reclaimed once dedicate e. g.
If a person spends N$10, 000. 00 to purchase a car, the value of the automobile, after five years will be less than the total amount spend to get it. The N$10, 1000. 00 is definitely cost that is certainly " sunkвЂќ and cannot be recovered when spend.
The opportunity cost can be seen as value and sunk cost since money/resources.
b) Inflation and interest rates
Inflation is a within the general standard of prices of goods and services. Consequently, inflation reflects a decrease in the getting power every unit involving.
Interest rate is definitely the rate, normally expressed because percentage, at which interest is definitely paid by simply borrowers when you use money that they borrowed coming from a loan provider.
For example , in the event you borrow money through the bank to acquire a house, your bank receives rate of interest at a predetermined charge for acknowledging to use the funds and in turn of financing it towards the borrower.
c) Macro and microeconomics
Macroeconomics is a part of economics that deals with the performance, structure, behavior and decision-making of your economy in general.
In contrast, Microeconomics is a element of economics learning the behavior of individual households and firms in making decisions on the allocation of limited resources, how these decisions and behaviors affect the supply and require of goods and services, which determines rates, and how prices, in turn, decide the quantity supplied and volume demanded of goods and companies.
d) GROSS DOMESTIC PRODUCT and GNI
GDP (Gross Domestic Product) is a measure of national cash flow or countrywide output and national costs produce within a particular nation, whilst GNI (Gross National Income can be explained as the total of value added by every resident makers plus any kind of product taxes not included inside the valuation of output in addition net statements of main income by abroad.
The earnings of a To the south African possessed company with Namibia is only going to count towards South Photography equipment GNI and Namibia's GROSS DOMESTIC PRODUCT.
e) Positive and Normative Assertion
Positive Assertions, in economics, concerns what " isвЂќ, " wasвЂќ, or " will beвЂќ and contains simply no indication of approval or disapproval. Positive statements happen to be testable and they are contrasted with normative statements, which do make value decision whether a condition is subjectively desirable or not.
For example , the following affirmation is positive since it delivers factual, testable information about the globe.
" The unemployment price is currently by 9%вЂќ
Declaration such as:
" The lack of employment rate is too high. вЂќ
is a ordre statement because it includes value judgment which is of a prescriptive nature.
Diverse Economic Devices
Almost all countries encounter a shortage problem and must make decisions about what to make, how to produce and for who. How these types of decisions are created depends on the economic system a specific country uses. Hence, economic system is a way in which a country's economic system is organised, organized and managed.
In other words, economics devices can be seen as being a set of guidelines or knowning that governs just how scarce methods are used to produce goods and services that satisfy human requirements.
There are three key economic devices, namely capitalism, command and mixed financial systems.
A. Capitalism Economic System
This is a fiscal system based on private home and the market. It gives home rights to individuals and businesses and they individual all the elements of...