Economics - Choice made under uncertainty

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ECONOMICS - Choice under uncertainty 

In this post i have tried to explain the concept of economic choice which is made under different conditions of certainty or probability. In economics we all now that resources are scarce for everyone be it a producer or a consumer. With this scarce resources we try to optimize our level of satisfaction. 

Producer tries to use varied economic theories like PPC , Isocost, IC Curve and other cost theories to solve this scarcity problem for allocation of resources.

Consumers also tries to maximize its satisfaction according to the utility functions and consumer equilibrium concepts. 

Though in this video i have discussed about the topics of Choice , as  with this scare resources we have to ultimately make a choice. Whenever a producer or a consumer make a choice he has to take choice. The choice is made under different conditions of probability. The conditions can be Risk, Certainty or uncertainty. 

The choice made under certainty has a possibility of 100% or 1 of occurrence. Ex- Investment in a government bond will generate a fixed percentage of return.
The choice made under risk can have a possibility or probability ranging from 50-50, 80-20 anything.Investment made in equity market is subjected to market movements.
The choice under uncertainty is not calculable or not expected, example: covid situation and economic loss was uncertain.

The measurement of risk possibility can be done with the Probablity techniques and measures of standard deviation.

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