Parables in Economics - Assignment Example

?Microeconomics Question Parable Parables in economics are often created to understand the effect and subsequent effects resultingfrom the same effect. Frederic Bastait, once a French economist, introduced the parable concept where he used the parable of the broken window fallacy in explaining the why destructions do no benefit economies. The use of the parable is the sure way of understanding the broken window fallacy (Rockwell and Ludwig Von Mises Institute, 2008). Created Parable: A man’s son breaks his television; the man has to replace the television. In this case, other observers consider this situation in different ways as man and deduce that the boy has done some service to the community in that his father has to replace the television set by buying or repairing the broken one. While buying the television, the seller will have spent on something else thereby boosting the local economy. Therefore, in the perspective of the observer of these events, the ill behavior of the man’s son or breaking of the television set has stimulated the economy; however, according to Bastiat, the entire understanding exposes a fallacy. Looking at the concept brewed in this case, breaking of the television reduces the man’s disposable income that he may not be able to purchase; for instance, a new shirt or commit to other luxuries. Nonetheless, the breakage of the television is helpful to others; for example, the seller or the person repairing the television. It should be noted that despite the breakage of the television set being helpful to others; it robs industries and reduces the spending on other goods and or services. Replacing an item that was already bought is regarded as the maintenance cost as opposed to buying new items or items that the owner has never had (Rockwell and Ludwig Von Mises Institute, 2008). Therefore, in essence, buying or repairing the television will never stimulate production; hence, the entire process does not boost the economy. Hence, in an economic sphere, it is worth noting that an effect will lead to a subsequent or series of effects and the destructive effects will never lead to the growth of any economy other than influencing the same economy. Part 2 of Question 1 Time Value Analysis to Steps in Making Financial Decisions The most significant means in decision making including financial decision-making are the application logical and systematic decision-making processes. Application of application logical and systematic processes helps in time value analysis since they provide systematic and planned analysis. Therefore, it is vital that health care organizations to deploy organizational approach that incorporates application logical and systematic processes in making vital financial decision (Skousen, 2009). Applying this concept will ensure that they never miss profound factors in their decision-making. Six steps and practices can help the health care organizations to curb their challenges in financial decision-making. Creating a constructive environment for financial decision making A constructive environment for decision-making incorporates the establishment of objective of such decision making process. In other words, it is vital that the management of such health care organization to define the parameters the health organization could achieve with their desired financial decision. Additionally, the management must thereafter agree on a working process to be deployed and this will call for the incorporation of the significant stakeholders in such decision-makings. Generating applicable and relevant alternatives This process shall provide the decision makers with more options to choose from towards comprehensive financial decisions. Generation of alternatives allows the management or the decision makers to have numerous ways of solving financial challenges. Therefore, unreasonable alternatives will only worsen the problem. Finally, generating alternatives will help organizations of ideas. Exploration of the alternatives This process ensures that only effective and realistic alternatives are selected for decision-making, and this is done through analyzing the risks associated with the alternative decision, feasibility, and the implications of every idea to be incorporated in the decision making. Choosing the better alternative It is essential that the best alternatives are chosen for decision, and this can only be achieved by listing the alternatives in the order priority or significance. Checking the decision Evaluating the alternative will help in deciding for the best way. Moreover, checking the decision will ensure that the entire decision making process is thorough to avoid common errors that might lead to catastrophic consequences. Communicate the action or the decision This step involves an explanation of the decision especially to the implementation team and explains the effects of such decision of the health care organization. It should be noted that organized and systematic decision-making processes are usually vital mean of decision making especially for the large organization including health care organization. Question 2 Media and Surgical Heath Care Services The primary goal of every health organization is to provide their clients with quality health care services. In order to achieve this, most health care organizations often use sophisticated heath care equipment and qualified and experienced staff. In every line of duty execution, decision-making, and teamwork is usually vital for the delivery of quality services (Skousen, 2009). The surest ways through which the surgical health care service providers often evade risks is through proper communication and ensuring that miscommunication is avoided at all levels and costs. Additionally, this group of professionals usually conducts their activities through proper planning and plan execution. Finally, these medical service providers often ensures before they undertake any surgery they list all-possible risks, analyze, and list them in order of their individual effects of the client and the health organization (Hunter, 2007). It is worth noting the Memorial and Regional hospital states that it is committed to knowledge, skill, and compassion in its service delivery and in essence, these are significant or key element for them to mitigate the risks associated with their service. Part 2 of 2 It is apparent to note that no surgical services that are risk free. However, the quantity or risk varies from hospital to hospital. Nonetheless, the Memorial and Regional Hospital is highly affected by the standalone risks that have accrued since they have invested heavily in surgical equipment (IMA, 2012) disregarding other areas of investment. The hospital found itself in this situation since it did not analyze its total investment returns depending on the stock performance and security. As per the care herein, the hospital management could have understood the fact that some stocks often grow in value as others depreciate, but the equipment never grows in value, usually becomes insolvent, and become worthless. References Top of Form Bottom of Form Top of Form Bottom of Form Top of Form Bottom of Form Top of Form Top of Form Bottom of Form Bottom of Form Top of Form Top of Form Hunter, W. (2007). Trillionaire: Creating & sustaining hyper-growth-- in any environment : [a novel]. Bloomington, IN: AuthorHouse. IMA, . (2012). Wiley CMA Learning System Exam Review 2013, Financial Decision Making, + Test Bank. New York: Wiley. Rockwell, L. H., & Ludwig Von Mises Institute. (2008). Left, the right, and the State. Auburn, AL: Ludwig von Mises Institute. Skousen, M. (2009). The making of modern economics: The lives and ideas of the great thinkers. Armonk, N.Y: M.E. Sharpe. Bottom of Form Bottom of Form Read More