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
How opportunity cost is a either or
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…
The Opportunity Cost of 1 mobile phone 30/30 = 1 apple
The Opportunity cost of 1 apple 30/30 = 1 mobile phone
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 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…
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…
relationships. I would like to involve my individual managers before announcing important news; so that the employees’ get motivated. I want them to feel secure and work independently. I would like to create opportunity for my employee’s to ask questions through organizing open discussion session. This opportunity makes employee’s to provide better performance during any organizational transformation.
Sometimes geographical distance may prevent face to face meeting, then I would like to take employees’ advices…
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…
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?
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,…
how to balance fixed and variable costs and how to apply economic cost concepts in making business decisions. Throughout the reading and discussions, each team member has different areas in which he or she struggled, felt confident, and related to the field he or she works in.
Identify production level to maximize profits.
When developing a business plan, the company or organization must ensure the plan includes the correct production level to meet the costs so the company can maximize the profits…