Opportunity Costs and Hidden Inventions I disagree that I am not wealthy enough to have this Bugatti because in reality, who is wealthy or not wealthy enough to afford what the car is really worth? We really do not know. I believe that the companies who produce these expensive cars only price them as high as they do because they know only a certain percentage of wealthy people will buy them. If the producers of these cars priced them at what they were really worth, very few people would buy them. If these car producers price their cars at a ridiculously high price, a small percentage of wealthy people will still buy these cars. Moreover, no matter what price these cars are marked for, not many will be bought. A company may be thinking, for example, if only 100 of these cars will be sold regardless of the price; why not jack up the price as high as possible? The company may lose a few sales here and there from buyers with a spending limit, but the majority of the people buying these cars most likely do not have a spending limit. With companies pricing items higher than what they are really worth, it is hard to decipher who is wealthy enough to own an item or not. Consequently, it does not really even matter who has the car if they do not even have any expenses to pay for it. Companies may also be jacking up the price of these cars so only a certain population of wealthy people will buy them, which in turn sets a precedent for the price of what people are willing
Question 1 a) China: The Opportunity Cost of 1 mobile phone 30/30 = 1 apple The Opportunity cost of 1 apple 30/30 = 1 mobile phone Thailand: The opportunity cost of 1 mobile phone 20/10 = 2 apples The opportunity cost of 1 apple 10/20 = 0.5 mobile phones Comparative advantage: Comparative advantage is a situation where one country can produce a good or service with a lower opportunity cost than the other. In this particular circumstance China has comparative advantage…
How opportunity cost is a either or Matt Harmon Liberty University How opportunity cost is a either or Opportunity cost is the highest valued alternative that must be sacrificed as a result of choosing an option. (Gwartney/Stroup/Sobel/Macpherson, 2014) Opportunity cost happens in every decision making intense in life. Every choice has a cause and effect. You cannot have everything you would like because many things are scarce, such as goods (food, education, time, things man-made.) (Gwartney/Stroup/Sobel/Macpherson…
What are some fundamental issues that should be addressed before a crisis occurs? During an organizational crisis, what are some of the vital areas that need to be addressed? The organization when it fails to achieve its goals, demands, and unable to avoid potential risks is called organizational crisis (Milburn, Schuler, & Watman, 1983). There are some significant issues an organization needs to be addressed before a crisis occurs. The first issue is the ability to assess the risk for its own…
getting the maximum benefits from its scarce resources. Equality – means that those benefits are distributed uniformly among society’s members. 2. The cost of something is what you give up to get it Because people face trade-offs, making decisions requires comparing the costs and benefits of alternative courses of action. Opportunity cost – of an item is what you give up to get that item. 3. Rational people think at the margin Rational people – people whom systematically and purposefully…
and the rule of law are the most important institutions; they are defined by contracts, legislation and enforcement. 1.2 Scarcity, Choice and Opportunity Cost • Because we live in a world of scarcity, where not everyone can have everything that they desire, this brings choice, the decision that people…
Question 2 C: For the US the opportunity cost of producing cars is 5 tons of grain each year. The opportunity cost for gain is 2 cars per year. The opportunity cost of cars for Japan is roughly 2.5 tons of grain and the opportunity cost for grain is 2 cars per year. Question 2 D&E: Neither country has an absolute advantage in producing cars, although the opportunity cost is lower for Japan to produce cars because of production limitations on grain. Neither Country has a comparative advantage on…
difficult” o The study of choices that people make when wants exceed resources • The economic problem o Opportunity costs: What do u give up and what do you get The bests alternative The value that you could’ve gained by doing/purchasing the next best alternative E.G. Olympic Power • Financial Opportunity cost: o Covering all her annual expenses o Saving money • Other opportunity costs: o A social life and a family life • She gives up: o $26000, family, social life, job security…
than the competitions, by having less total input per unit of output. Comparative advantage is the ability of a group or individual to fulfill an economic activity at less cost more efficiently. The first question to answer is which international trade components can be identified in the video? Secondly, what is opportunity cost? Third, what is the theory of comparative advantage? Lastly is, how might a company engaged in international business act on the information contained in the video? Absolute…
1. Specialization and Productivity: The Basis for Specialization: o Specialization involves assigning production to the person who can perform the task with the least opportunity cost. o The person with the least opportunity cost is not necessarily the one who is best at performing the task. The gains from specialization and absolute vs. comparative advantage: Suppose, a farmer and a rancher each work 10 hours a day and they can devote time to growing potatoes, raising cattle,…
arising from a change in the managerial control variable, . – Marginal cost: • The change in the total costs arising from a change in the managerial control variable, . – Marginal net benefits: 1-21 Economics of Effective Management Marginal Analysis Principle I • Marginal principle – To maximize net benefits, the manager should increase the managerial control variable up to the point where marginal benefits equal marginal costs. This level of the managerial control variable corresponds to the level…