Still Thinking Of Assignment Help & Grades ? Book Your Assignment At The Lowest Price Now & Secure Higher Grades! CALL US +91-9872003804
Order Now
Value Assignment Help

Assignment sample solution of ECON1010 - Principles of Microeconomics

Q.1 Explain the concept of opportunity cost and its significance in decision-making.

Q.2 What are the key characteristics of perfect competition?

Q.3  How does the law of demand function in a competitive market?

  1. 1
  2. 2

Economics Assignment Sample

Q1:

Answer :

Q.1 Ans. Opportunity cost represents the value of the next best alternative foregone when a decision is made. It highlights the trade-offs inherent in every choice, making it a critical concept in economics. For instance, if a student chooses to study instead of working, the opportunity cost is the income they could have earned. Recognizing opportunity costs helps individuals and businesses allocate resources efficiently, prioritize investments, and evaluate potential outcomes. By weighing the benefits and costs of different options, decision-makers can optimize their strategies to achieve desired goals while minimizing sacrifices.

Q.2 Ans. Perfect competition is a market structure characterized by many buyers and sellers, homogeneous products, free entry and exit, and perfect information. In this scenario, no single participant can influence market prices, as supply and demand determine equilibrium. Firms in perfect competition are price takers and earn normal profits in the long run. While rare in practice, this model provides a benchmark for evaluating market efficiency and deviations, such as monopolies or oligopolies.

 

Q.3 Ans. The law of demand states that, ceteris paribus (all else equal), the quantity demanded of a good decreases as its price rises and increases as its price falls. This inverse relationship is driven by substitution and income effects. In a competitive market, the demand curve typically slopes downward, reflecting consumer behaviour. Understanding this law helps businesses predict sales trends, adjust pricing strategies, and respond to market changes effectively.