Economics Studies how?

Question

1) We make choices in the face of scarcity.

2) Firms make profits.

3) To create incentives so scarcity don't exist.

4) To organize production so scarcity doesn't occur .

5) Business reach decisions

Answer 1

The answer is: 1) We make choices in the face if scarcity.

Scarcity will always exist so that rules out 3 and 4. And economics is not all about firms, it also looks at consumers, markets, governments, national governments and international markets. So that rules out 2 and 5. The answer is definitely 1 since there are unlimited wants and needs in the world with only finite resources.

Hope that helps.  

Answer 2

I define economics as study of nature, composition, properties, laws and classification of wealth. Regarding the answer to all the questions you have asked, two general laws of wealth:Law of Conservation and Law of Equilibrium dictate the terms. Human behavior has no say.  Law of Conservation is the cause and Law of Equilibrium is the effect. Please study any book on chemistry to know further about the laws.

Answer 3

I'm not sure what you are trying to say here. I will still attempt to answer.

Scarcity is the fact that we have unlimited wants, we would like have a mansion and a feast every day, and limited resources, we don't have enough food for a feast everyday, and there isn't enough electricity for us to power our mansions. The goal of economics is to furfil as many wants as possible with the resources we have available.

Firms make profits - This refers to capitalism, and that the driving need of firms is to make profits, so that they may be able to allocate more resources to their wants. The way firms make profits is by selling goods, which relies on Supply and Demand. Supply and Demand work on the fact that Consumers are only willing to buy so much of a good at a certain price and that the lower the price, the more goods will be sold. Sellers will sell a certain number of goods at a given price, and the higher the price, the more goods they are willing to sell. At a certain price, the seller will want to sell as many goods as the buyers want to buy, and so at that price, all of the goods will be bought and no one will want any more. Profits are made buy a firm making more money from selling their goods than it took to make them (which includes saleries, machinery costs, and raw materials).

You can not make it so scarcity doesn't exist.

Organizing production so that scarcity is also impossible. However you can furfil all of the wants for a certain product if you produce enough of it (people don't really need that many chewing gum wrappers if there is no gum for example).

Businesses reach decisions by finding ways to maximise product, sometimes taking into account external factors, like human Rights violations and pollution, or the fact that the goverment will shut them down if they dont do certain things.

I hope that helped.

Oh, #1, all of economics is based off of that.