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Choosing one alternative requires giving up a number of other alternatives. There is an opportunity cost involved in making choices. Opportunity cost is considered to be the most important concept in economics. It is the value of the best alternative that is given up in order to make a choice (Rittenberg and Tregarthen 2011). It is on these ideas that the theory of comparative advantage is based. A country is deemed to have a comparative advantage in producing a good if it has a low opportunity cost n producing that good. Firms as well as countries have a comparative advantage in producing one good or offering one service over another. It therefore means that since resources – labor, capital are land are scarce they need to make a choice.
The production possibility curve (PPC) is a graphical representation of the different combinations of goods and or services that can be produced in an economy with the resources and technology available. It brings together the three concepts of scarcity, choice and opportunity cost. The choice of producing one good instead of another or a particular combination of goods reflects scarcity of resources, making a choice between alternative options, and highlights the concept of opportunity cost. The slope of the PPC represents the opportunity cost of giving up one good or service for another – in the case of a simple two good/service model. It is this opportunity cost that is used to determine whether a comparative advantage exists. An economy is deemed to have a comparative advantage in the production of a good or service if the opportunity cost of doing so is lower for that economy than any other.
Deardorff in his article entitled The General Validity of the Law of Comparative Advantage though making the point that the law does not hold in multi-commodity world indicates that the comparative advantage determines the form that international trade exhibits (941). This proposition, Deardorff indicates
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The transitional economy is a kind of economic system which is currently identified to witness a continuously developing phase altering from being highly centralized towards the construction of a free market structure. This transition can be identified referring to the implemented economic regulations planned for the development of an economy over a certain period of time.
The organization produces Automobiles, Engines, Commercial Vehicles and motorcycles. Toyota operates in global market and the demand of every products of Toyota is highly recognized in international market place. The study will reveal the Microeconomics and Macroeconomics aspects of Toyota Camry in Indian Market.
Economist would consider an ambiguous measure of the economic welfare but not necessarily those measures which exist as an approximation of the gross domestic product as well as the National income which is only achieved when the overall personal income increase. In the UK gross income has not been in tandem with other developed countries.
It became imperative for the bartenders to keep an eye out for such trouble makers and to identify the potential trouble seekers for they not only got into arguments with the public but with the staff too. Over the years, Joey developed the ability to look at a person’s face and place him into the category of trouble makers.
Such issues include the concept of opportunity cost, production possibility frontier, and scarcity of resources, tradeoffs, efficiency, and the market structure in which Thasta operates. First section: Opportunity Cost Concept The management of Supa Drink must factor in this critical concept as they plan to roll out Thasta into the beverage market.
MACRO AND MICRO ECONOMICS Command/ Centrally-planned Economy Introduction A command economy one in which the coordination of economic activities (supply and price) are controlled through administrative means rather than market mechanisms. The economic agents particularly the production organizations operate as directed by the governments in place; the government decides which goods are produced the amount, as well as distribution.
I also designed how surveys and general observations were to be conducted.
I collected my data in four main ways. I delivered questionnaires to various departments in the U.S. federal government within Florida. I then collected them for analysis. I interviewed
However, wholesalers are more disadvantaged than retailers since they require a lot of money to buy goods in bulk from manufacturers, as compared to retailers who require a lesser amount to buy from wholesalers. On the other