Search
×

Sign up

Use your Facebook account for quick registration

OR

Create a Shvoong account from scratch

Already a Member? Sign In!
×

Sign In

Sign in using your Facebook account

OR

Not a Member? Sign up!
×

Sign up

Use your Facebook account for quick registration

OR

Sign In

Sign in using your Facebook account

Shvoong Home>Social Sciences>Economics>Economic Principle Summary

Economic Principle

Article Summary   by:oxlay    
ª
 
The economic principle (P. passim) (rational principle, principle of economy) is that between input use and yield an optimal balance must be established.

It exists in two versions:

(1) Maximum version: For a given allocation of resources is to achieve the best return.
(2) Minimum version: A predetermined yield can be achieved with the lowest possible use of resources.

Problem:
Size (use of funds or income) must be determined. The occasionally-heard formulation, one should "reach with the least use of resources a maximum return," is a meaningless statement.

Example:
Economically consistent with that principle not only the student who concentrated all his labor power to the study to place the best possible exam is; economically are also those students who want to merely exist and only for essential
necessary time invested in his studies.

The power transmitted to the area an economic activity rational principle. Generally, it can be interpreted as follows: Given a performance can be achieved with the least possible use of production factors or coexisting factor input is maximize performance. Since the combination process in an enterprise production factors are not comparable, the production factor quantities evaluated with the values ​​and prices and thus made the same name as a cost. The economic principle can then be interpreted as follows: A specific performance is to achieve the lowest possible cost and with a certain given cost deployment is the largest possible production capacity to achieve. Economy principle.

The economic principle is based on the rational principle, which states that a goal can be reached with the least possible use of resources. Transmitted on the economy can be formulated as the rational principle economic principle in two respects:

First as the maximum principle: Given a cost of production factors, the largest possible yield goods can be reached,

Second as a minimum principle: A given property is to achieve income with the least possible use of production factors.

The economic principle is a purely formal principle, which does not make any statements about the objectives of the economic damage ftssubjektes, but merely describes the way in which economic activity.

The ö P. states that a given goal with the least possible use of funds or with a given allocation of resources to meet the highest possible goal can be realized. In this formulation, the ö P. expresses a formal rationality. It may therefore be referred to as content-empty. The principle can be as many substantive interpretations as there are quantitative or value goals. Only if the particular target is developed, which enables P. ö an economic action.
Published: August 29, 2012   
Please Rate this Summary : 1 2 3 4 5
Translate Send Link Print
X

.