StudentShare
Contact Us
Sign In / Sign Up for FREE
Search
Go to advanced search...

Project on Micro Economy - Essay Example

Comments (0) Cite this document
Summary
Name Professor Title Date Project on Micro Economy The proposed business idea is the production of soft drink referred to as Thasta. The proposed name for the company is referred to as Supa Drinks Company Limited. The paper will discuss the various micro-economic issues around production of Thasta…
Download full paperFile format: .doc, available for editing
GRAB THE BEST PAPER91.2% of users find it useful
Project on Micro Economy
Read TextPreview

Extract of sample "Project on Micro Economy"

Download file to see previous pages Opportunity cost refers to the best alternative forgone when Supa drinks decides to produce Thasta over other product lines. When the concept of opportunity cost is discussed it is critical to put into perspective issues such as implicit and explicit cots. Implicit cost is when an alternative if forgone but there is no actual cost included. Therefore, implicit cost refers to financial benefits forgone when one makes one decision over the other. On the hand, explicit costs refer to cost that is easy to account for owing to the fact that their effects are easily traceable (Hirschey112. They include cost such as wages, rent, material cost. In fact, in implicit costs, the management has to pay the money directly. By Supa Drinks deciding to start the production of Thasta, it is going to incur both implicit and explicit cost. The implicit cost incurred refers to the forgone profits that Supa Drink has not received because they opted to produce Thasta instead of the other alternative. Thasta was faced with several options, which include production of detergent, production of stationery, and production of electronics. Out of all the production choices, the one that had the best alternative to Thasta was a production of detergents. The company had estimated that it would record on average net cash flow of $ 200, 000 per annum. By deciding to produce Thasta over the Detergent, it has undergone an implicit cost of $200, 000. On the other hand, explicit costs that are incurred by the company include labor costs, input cost and general expenses. Production of Thasta is a costly affair; there is therefore, huge initial capital outlay that is required to start the production of Thasta. There is cost required to erect a plant for production of the drink, there is wages that will be incurred to pay workers, and general expenses such as electricity expenses among others. The explicit cost that will be incurred by the company is outlined below. Item no Expense item Cost per annum ($) 1. Labor cost 50000 2. Plant maintenance cost 40000 3. General cost 10000 4. Promotion costs 15000 5. Total cost 115000 It is worth noting that opportunity cost refers to both the implicit and explicit cost. Therefore, by management deciding to produce Thsata over the best alternative of the production of detergent will result to an opportunity cost of $ 215000. This is calculated by summing up the total implicit cost, which is $ 200000, and the total explicit Cost, which is $115000. It is also recommended that the company operate at economic profits so that there is both allocative and productive efficiency in production. Allocative efficiency refers to a situation in which the net profit is zero. This point of production would mean that the company is not under producing or overproducing the soft drink. Second Section: Trade Offs The company will produce two brands of Thasta, which is the orange flavored and the other is coke flavored. This means that the company must consider the issue of trade off when deciding the units of the orange flavor and coke flavor to produce. It is worth noting that the company has a production capacity of up to 50000 units’ daily production. This production capacity must be divided between the two brands. This brings about the concept of trade off. As the company produces more and more of orange flavor, it will produce less of Coke flavor along the production possibility ...Download file to see next pagesRead More
Cite this document
  • APA
  • MLA
  • CHICAGO
(“Project on Micro Economy Essay Example | Topics and Well Written Essays - 1250 words”, n.d.)
Retrieved from https://studentshare.org/macro-microeconomics/1489632-project-on-micro-economy
(Project on Micro Economy Essay Example | Topics and Well Written Essays - 1250 Words)
https://studentshare.org/macro-microeconomics/1489632-project-on-micro-economy.
“Project on Micro Economy Essay Example | Topics and Well Written Essays - 1250 Words”, n.d. https://studentshare.org/macro-microeconomics/1489632-project-on-micro-economy.
  • Cited: 0 times
Comments (0)
Click to create a comment or rate a document

CHECK THESE SAMPLES OF Project on Micro Economy

Argentina Economy - Analysis Project

... Argentina Economy – Analysis Project Introduction Argentina economy is the third biggest economy in Latin America, with high standards of living and per capita income. Argentina is an upper middle-income economy and exhibits the characteristics of a strong foundation for future market size expansion, and increments in foreign direct investment. It also exhibits an augment in the percentage of high technology exports as a share of the entire manufactured products. Argentina gains from rich natural resources, high literacy rates of its population, an agricultural sector which is export oriented, and a diversified industrial base. Traditionally, Argentine economy had been agriculture based, but in the recent years, service and industrial...
13 Pages(3250 words)Research Paper

Micro

... impact can also be traced to the market of Economy cars which are fuel-efficient. Since the increase in price of gasoline will decrease the demand of Luxury cars, the consumers will tend to switch to the less-expensive alternative – Economy cars. Since Economy cars are the substitutes of Luxury cars, decrease in demand of Luxury cars will increase the demand of Economy cars. Graphically, in the Economy car market, the demand curve of Economy cars will shift rightward and now there is more demand of Economy cars at each unit of their prices. Given the supply of Economy cars, the rightward shift in their demand will increase the equilibrium quantity of Economy cars since the increase in their demand will lead to a situation of ‘excess demand...
4 Pages(1000 words)Essay

Micro

...?Monopoly – price discrimination Monopoly is a market structure where one firm serves the entire market. A monopolist can maximizes their profit withtheir knowledge of the market demand and the power of single operation in the market. A monopolist can set the price at a level they desire and the price decision is determined by their output decision. (Chakraborty, 351-354) Pricing Decision of a Monopolist A monopolist faces the negatively sloped market demand curve unlike in perfect competition where a firm faces the market competitive price. Therefore a monopolist sets the market price where its MR=MC. The logic is that the cost required to produce another unit of the output should be equal to the revenue generated... – price discrimination...
2 Pages(500 words)Essay

Micro

... al affiliation Concept of scar and opportunity cost According to Mankiw economics is the learning of how individuals make decisions about the needs to purchase under the principle of scarcity (Mankiw, 2004, p.3). Resources available to satisfy individuals’ wants are limited such that individuals will have to choose between alternatives. The notion of scarcity results to the problem of opportunity cost. Opportunity cost is the value of the best foregone alternative. Since there is scarcity of resources, people have to choose between different opportunities. The problem of allocation of scarcity necessitates the principle of opportunity cost. According to Samuelson and Temin the opportunity cost of a choice is determined... al affiliation...
4 Pages(1000 words)Assignment

Micro project 5

...Micro Project Table of Contents Question 3 Question 2 4 Question 3 6 Question 4 7 Question 5 8 References 9 Question Governments can response to the externalities by various ways. They can response through the corrective taxes and subsidies. The activities those have negative externalities can be internalized through taxing by the governments. Likewise, the activities those have positive externalities can be subsidized. Another way of response can be through the use of pollution permits. Thus, the buyer of the permit will get the right to pollute to a certain extent. Even control measures can be taken for the negative externalities. All these options are good but the best way is the corrective tax as it can reduce the tendency...
4 Pages(1000 words)Essay

Micro

...Micro Because capital goods require more factors of production (land, labor, capital, and entrepreneurship). As a result, these capital goods can be sold for a larger profit, thus increasing the PFF to outside of its boundaries. On the other hand, consumer goods do not require the same amount of input and thus are not worth as much. Poorer countries that do not have access to higher education and technological input are more likely to focus on labor-intensive goods such as textiles and agriculture. If a country wants to expand its economy, then it needs to shift its focus away from the production of consumer goods and focus more on capital goods. This will result in an outward shift of the PPF curve. 2) The reason why countries...
2 Pages(500 words)Assignment

Micro economics individual project

Historical Perspective US faced one of the most critical recessions of modern history and is also currently going through economic slow down. Due to the credit crunch which emerged in late 2007, not only the financial sector of the country suffered but also other sectors most notably the auto industry of the country suffered a lot. In order to help the auto industry to withstand the challenge and save it from complete collapse, government intervened and provided equity funding to large auto makers in the country. This article is about the role of government in intervening the free market to help organizations to overcome recessionary periods besides keeping demand and supply dynamics in equilibrium.
Why this article is worth wr...
2 Pages(500 words)Essay

Micro Financing/micro credit

This is where the role of micro finance comes into play.
Microfinance refers to the supply of financial services to the people who are classified in the lower and middle class of income or groups that lead harmony among themselves together with small scale customers and the people who are in self-employment and do not have easy access to the banking services in order to raise credit for their personal use or for the use of their business. (Ashley, 2010)
Microcredit is referred to as the supply of credit and lending to the poor and the low income customers and consumers. Even though microcredit is just a part of the microfinance facility but it is inevitable to discuss Microcredit during the discussion of Microfinance.
...
4 Pages(1000 words)Research Paper

Micro

... Number] Micro Economics “Consumer” Microeconomics emphasizes on smaller but significant units of thewhole economic system. It studies the impact of profit/loss, sale/purchase, decision making, preferences and behaviour of the individuals in the economic system of any society. Thus, business owners’ and consumers’ participation and inclination determine how any product or service can become useful for sale or purchase so to satisfy the needs of consumer and generate profit for entrepreneurs. However, competition in business market impacts directly on the decision of producers to review their price and quality. Yet, in the economic cycle consumer is inevitable to business’s working and survival. As any produced good or service basically...
4 Pages(1000 words)Term Paper

Micro

... Program 10 January Micro The ment, ‘the enemy with us: Lessons from the European Escherichia coli 0102:H4 outbreak,’ is the title of an article that Karch et al. (841- 848) authored and EMBO Molecular Medicine published in 2011. This discussion analyses the statement in relation to risk analysis, with focus on hazard identification, hazard characterization, hazard management, and hazard exposure assessment. Hazard identification The statement succeeds in hazard identification as it identifies both health concern and pathogen that causes the concern. This is because an established association between a disease among a target group and a pathogen in a food explains hazard identification. Knowledge and data helps in the identification...
2 Pages(500 words)Essay

An Outlook of U.K Economy

The UK has large coal, natural gas, and oil reserves; primary energy production accounts for 10% of GDP, one of the highest shares of any industrial nation. Services, particularly banking, insurance, and business services, account by far for the largest proportion of GDP while industry continues to decline in importance. GDP growth slipped in 2001-03 as the global downturn, the high value of the pound, and the bursting of the "new economy" bubble hurt manufacturing and exports. Output recovered in 2004, to 3.2% growth, then slowed to 1.7% in 2005 and 2.7% in 2006. “ (Exxun.com, 2007)

The most prominent characteristic of the capitalist economy is the control of few people on a large amount of Capital. These people...
6 Pages(1500 words)Term Paper

Growth Performance of Indian Economy

This percentage is expected to rise to 70% by 2030 - the largest in the world, according to a report titled Destination India- from the Investment Commission of India.” (Hood).
We all know that for more than a century, the United States has been one of the largest economies in the world. However the past few years showed major development in some countries, and the focus moved to Asian countries like India and China which were progressing very fast.

According to the experts, share in the total world GDP of India will rise from 6% to 11% by the year 2025. The GDP of India rose to 9.0% during the year 2005-06 again to 9.4% in 2006-07. The projection reports say that India will be 60% the size of the US economy...
6 Pages(1500 words)Assignment

The Importance of Tourism to the World Economy

Since the eighties, perceived risk research has been of ongoing interest to tourism researchers, Dolnicar (2005) and Dickson, Chapman, and Hurrell (2000)  states. Contributions often include those which investigate positive risk as a factor in increasing tourists who are seeking a thrill. On the other hand, there are also those who view these risks as something negative, thus avoiding the destinations which are haunted by different risks such as diseases, terrorism and other forms of political instability (Dickson & Tugwell, 2000).

The current qualitative research inquired about the risks perceived by young people as regards both domestic and international traveling. A sample of 23 was interviewed for this purp...
15 Pages(3750 words)Research Paper

My College Education and Internship Project

As I complete my education at Touro College it indicates that I am taking the first step towards launching into a full-fledged career. It not only signifies the end of my education but also my readiness to begin working and contribute to the world in general. I believe that my internship at Web fact, a technology company, has made me apply the concepts and skills that I have learned during my college education. The application of the theory that I learned in college in my internship helped me put my education in perspective. 

I am in my 5th semester of the Bachelor’s degree in Management and International Business at Touro College, Berlin. I find it exciting to study in English and getting an international pe...
9 Pages(2250 words)Coursework

The Work Breakdown Structure and its Advantages in Project Planning

A typical construction project involves a WBS that evolves from an initial task that is successively subdivided into smaller work blocks until the lowest level is reached, indicating a tree-like structure. Subdividing the project breaks down the project work effort into packages that are both manageable and independent. It connotes that the lowest level of the package corresponds to the smallest project work, which requires the shortest completion time periods. As WBS shows the relationship of all elements of a project, a sound basis for cost and schedule control is provided.

Some lists of project activities involved in WBS include budgeting, cost allocation, time allocation and management, and quality assurance. These...
11 Pages(2750 words)Report

Billing System Upgrade with Web-Based Version Project of Rick Auto Enterprises: A Communication Plan

The project is envisioned to involve changes to existing business processes, changes to existing jobs, and/or the creation of new positions. With the new web-based version, customers and auto brokers will be able to view and pay their bills online, as well as access a billing customer service agent is required. This change will affect the billing, sales, and customer service departments but it is expected to reduce costs, improve customer satisfaction, and reduce the number of days for outstanding accounts receivable.
Ownership of the existing system rests with the Billing Department. However, with the benefits projected to be derived from the upgraded system, especially with the implantation of the web-based version, the Cus...
12 Pages(3000 words)Case Study

Project Risk Assessment: Qualitative Versus Quantitative Approach

The risks may vary in terms of nature or scope according to the situation. So since the risk is so common in project management, a very important aspect of managing a project is analyzing all the possible risks that are associated with that particular project. It makes no sense of going on with a project and not giving a thought to the risks that could affect the success. Once these risks are analyzed, the project manager will have all the possible risks in front of him. He will know the degree of risk and also the benefits that the organization will get if the risk is taken. Therefore only after a risk analysis, the project manager is in a position to conclude whether or not it is worth taking the risk and going on with a certain...
6 Pages(1500 words)Assignment

Project Management: Best Practices and Stakeholders Perspective

Employees of functional divisions are assigned or detailed to a specific project and then re-assigned back to the organization when the project is completed.
Project management is defined by the Project Management Institute (PMI) as the application of knowledge, skills, tools, and techniques to project activities to meet project requirements; and its methodology as the planning, monitoring, and control of all aspects of the project and motivation of all those involved in it to achieve the project objectives on time and to the specified cost, quality, and performance.” Being a temporary, one-time endeavor, it differs from the organization's operations and processes which are its current and permanent work to create a pro...
6 Pages(1500 words)Literature review

Project Planning Human Capital

Project planning involves a lot of factors and areas that we need to address for the effective management and handling of the project. The aim of this report is to provide a deep insight into some of the main areas that we need to address for the project of Adams's family farmhouse renovation. These issues are project team communication, project risk management, and deadline handling. Effective communication in a project provides a huge advantage regarding the better working and handling of the project. I have selected a very significant project regarding the preservation of the old and historical places. Here we require effective communication to provide better interaction among the designer, developers, and history preservation...
8 Pages(2000 words)Coursework

Effect of Corporations Moving Jobs Overseas on the Economy

The issue comes into focus, whenever there are political, economic debates or talks about H1B visa limits. The economic slowdown has further led to the intensification of these debates. But, despite apprehensions from different quarters, neither the companies nor the government has said a final word on the trend. Increasing levels of competition amongst the corporate houses have been one of the key highlights of the globalization era. Be it the retail sector, the banking, the automobile, the IT-enabled services, the white goods space, etc. the companies have always been on the lookout for reaching out to more number of customers while doing everything possible to please the existing lot. Leveraging the economies of scale has prove...
8 Pages(2000 words)Coursework
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.

Let us find you another Essay on topic Project on Micro Economy for FREE!

Contact Us