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Principles of Economics (Eco 101) Assignment:

1.Briefly discuss the elementary theory of utility. Utility theory in economics relates to the value of a certain good, service, or item. It suggests that goods, services, and items can be ranked according to their usefulness. Utility: means the satisfaction derived from consumption of a particular goods, commodities or services. With respect to theory, the utility of an item tends to be closely correlated to its price. An item such as gold, which is very useful and thus has great utility (combined with its scarcity), is very expensive. Total utility is closely tied to the bare concept of utility. Total utility points to the aggregate amount of usefulness and fruition there is to be gained from the use of a specific good, service, or other item.  Furthermore, the abstract measurement of utility is another key concept of the theory. Economists use an abstract measure for the amount of satisfaction you receive from something; it is called a ‘ util ’. A util is an abstraction because it i
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Eco 101-understanding normative and postive Economics and ceteris paribus

                                     1.    Normative and Positive Economics The normative economist tries to determine the desirability-undesirability of various economic conditions, situations or programs by asking the question: “What ought to or should be/have been?” The positive economist asks: “What is/was/has been?” While positive economics gathers and analyzes real data – about things that happen or have happened – normative economics relies heavily on value judgments and theoretical scenarios that present subjective results, i.e. how things should be or should have been. Normative economics tells us what things would be like or would have been like if public policy were or had been Normative statements usually deliver an opinion on economic scenarios instead of providing an objective analysis that presents proven facts. Positive Economics Tells you how it is/was Normative Economics Tells you how it should/ought to be or should/ought to have been Whoever is using normative econ
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