Question.3022 - Opportunity Cost (graded) Give an example of how the Principle of Opportunity Cost applies to your life. Think of a recent decision you made. It could be a decision as simple as whether to eat out or cook your own dinner, or it could be a decision to quit your job and go back to school. What alternatives did you consider? How did you arrive at your final decision? Did you implicitly weigh marginal cost and marginal benefit? How does the concept of opportunity cost apply to production possibilities curve (PPC) analysis? How can we use PPC analysis to examine what we do? Economic Systems (graded) Think of a business firm you recently visited (such as Walmart, Home Depot, Red Lobster, Barnes & Noble, McDonald’s, etc.). What motivated the producers of all the individual products in the store to make them and offer them for sale? How did the producers decide on the best combinations of resources to use? Who made those resources available, and why? How does the market determine who will get the goods and services? Who decides whether these particular products should continue to be produced and offered for sale? How do these decisions differ between capitalist and socialist systems? Instructions ? At least 200 words ? Always use, at least, 1 Economic term from the text, weekly key terms ? References in APA, at least 1
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I had an opportunity to buy myself a party dress. Instead of buying the dress I shelled out my money to buy a jacket instead as winter was round the corner. Though I required both of them, but my need of a jacket was a necessity as compared to possessing a party dress which was a luxury. I did not compare the prices of both, but an implicit calculation was going on in my mind which propelled me to buy the jacket now. My need for jacket preceded that of the dress. The marginal costs of both of them were nearly same, but the marginal benefit of the jacket was more than that of the dress. The production possibilities curve i.e. ppc implies a trade off in production between the available options. The ppc curve shows how much of consumption must be given up to increase the satisfaction by consuming the other good. Ppc is a representation of the amount of two different goods that can be obtained by shifting resources from the production of one to the production of the other. In other terms ppc shows the choice or preference between two different goods. In the given example the ppc curve would how the monetary allocation would result into more benefits in case of jacket as compared to the dress. (References: Onuma T, Comparative Advantage and Production Possibility Curve.) 2. I recently visited McDonald’s. The offerings varied from fast food items like pizza, sandwiches, burgers, and some desserts too. McDonald’s was motivated by the growing trend of fast foods all over. The producers have decided on the best resources by researching on the trends and prevalent tastes and choices. These resources were made available by the producers of raw materials like vegetables, fruits, and dairy products. The market mechanism works with the principle that the resources are provided to the producer who is willing to pay either adequately or more than others. In a capitalist market the nusiness entities decide as to what goods should be produced and offered for sale. However in the socialist economy the government has an interference in the business entities. Thus, the crucial decision as to what to produce, how to produce and how much to produce is often dictated by the government choice. The government has a say in all these matters. References: Hoppe H H, 1990, A theory of socialism and capitalismMore Articles From Economics
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