Concepts which produce different perspectives on social, economic, and political issues
Microeconomics concentrates on the actions of individual actors within the economy, like businesses and workers. This essay aims to explore the three concepts which produce different perspectives on social, economic, and political issues. The three ideas are taxes, government, and opportunity cost.
Taxes
Taxes mostly affect the political and economic part of the country but also affect the social issues of the citizens involved. Taxation is a crucial element in a country’s economic growth. Since the tax is mostly imposed, it plays a various role in the economy and political part of an economy. A nation generates its financial resources for public investments as well as social programs to promote its economy through the imposed taxes. Paying taxes does not only help in making funds but its also a crucial element in the universal agreement and bond between the country’s economy and its citizen. Therefore, through this agreement and obligation, citizens have a civic duty in paying the taxes to help in the progress and economic growth of the nation. The government would, therefore, not meet the demand and needs of the society without imposing taxes on its citizens (McEachern, 2017).
Government
The government is among the vital object of analysis in microeconomics. The government impacts microeconomics to some extent. Governments enlighten people to work harder when businesses and individuals finance them through taxation. When this happens, both businesses and individuals should work extra harder to produce an additional amount to mitigate the impact of funding the government. Occasionally, governments decide to spend money, and this alters the market. Businesses that receive a subsidy from the government they always produce at higher cost curves, unlike with the absence of support. This shows the importance of government subsidy in businesses.
Also, the government introduces policies having an impact on individual decisions whenever implemented through altering incentives and inputs for a single day to day economic decisions. The alteration is presented in the form of regulations, tariffs, licensing fiscal policy, among others. These policies influence the benefits and costs that individual actors come across almost in every aspect of modern life (Tucker, 2010)
Opportunity cost
The loss of a potential gain would incur opportunity costs if one had to choose an alternative or best option. Opportunity costs are not only monetary but also the real value of output foregone, time loss, and pleasure. If there is no sacrifice involved in making a decision, for example, in business, there will be no opportunity cost. Therefore opportunity cost requires sacrifices. Mostly, opportunity costs not involving cash flows are not in the record in the books of account, but they are crucial considerations in business decisions. In some, everyday choices, the opportunity cost is not quantifiable since, for instance, one cannot measure the value of a low paying fulfilling job versus a high paying unfulfilling one. However, some of the everyday decisions do not need mathematical formulas since they are already ugly numbers of money. Opportunity cost explains the essential relationship between scarcity and choice. Therefore, opportunity cost plays a crucial part in attempts to ensure that scarce resources are used efficiently (Besanko, Braeutigam, Gibbs, 2011). //