alternative. It is reasonable to assume that all organizations have to work with scarce resources‚ no matter how large or profitable. A key role that managers play is to decide how best to allocate their organizations’ scarce resources. From an economic standpoint‚ optimal decisions involve their weighing of the benefits associated with a particular decision against the opportunity cost of this decision. 2. Define the market process‚ the command process‚ and the traditional process‚ How does
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associated with high price causes decline in the value for money. It exists when the amount of money in the country is in excess of the physical volume of goods and services. Explain the reasons for this monetary phenomenon. Ans: Inflation: In economics‚ inflation is a sustained increase in the general price level of goods and services in an economy over a period of time. It can be defined as too much money chasing too few goods. When the general price level rises‚ each unit of currency buys fewer
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come forward and therefore higher the surplus that will be for those who decide to undertake it. B. Frictional Theory of Economic Profits Economic profits or losses are frictional profit theory. It states that markets are sometimes in disequilibrium because of unanticipated changes in demand or cost conditions. Unanticipated shocks produce positive or negative economic profits for some firms. For example‚ automated teller machines (ATMs) make it possible for customers
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Health economics - The Primer This series of articles will introduce readers to the emerging field of health economics. We will review how health economics influence decision making process in health care and the basic tools used in health economics. * 1. The Role of Health Economics * 2. Cost of Health Care * 3. Should Oncologists Care About Cost-Effectiveness Analyses? * 4. Classification of Health Economic Analyses * 5. Health Economics Research: Cost Utility Analysis
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according to the Neo-classical model of the firm‚ the firm’s objective is to maximise profit by producing a given level of output at the minimum cost level. Therefore in pursuit of this‚ factors such as learning effects‚ linkages and interrelationships between activities carried out by the firm‚ timing within the business cycle or with respect to other firms’ actions geographical location and the firm’s discretionary policies should be taken into account and asses their impact on the firm’s cost levels
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price ceiling of $3 will result in a A. B. C. D. shortage of 30 units. shortage of 15 units. surplus of 30 units. surplus of 12 units. 2. In a competitive market‚ the market demand is Qd = 60 - 6P and the market supply is Qs = 4P. The full economic price under a price ceiling of $3 is A. B. C. D. 6. 7. 8. 9. 3. The buyer side of the market is known as the: A. B. C. D. income side. demand side. supply side. seller side. 4. The law of demand states that‚ holding all else constant:
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where they live; and consumers typically have a very limited set of goods to choose from. As a result‚ many of the tools and concepts of microeconomics are of limited relevance in those countries. •macroeconomics Branch of economics that deals with aggregate economic variables‚ such as the level and growth rate of national output‚ inter· est rates‚ unemployment‚ and inflation. Trade-Offs In modern market economies‚ consumers‚ workers‚ and firms have much more flexibilityand choicewhen
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SUPPLY supply curve - in economics‚ graphic representation of the relationship between product priceand quantity of product that a seller is willing and able to supply. Product price is measured on the vertical axis of the graph and quantity of product supplied on the horizontal axis. In most cases‚ the supply curve is drawn as a slope rising upward from left to right‚ since product price and quantity supplied are directly related (i.e.‚ as the price of a commodity increases in the market‚ the
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price is approximately $22.50 c) Economically speaking‚ the goal of a company is to maximize profit‚ and maximizing profit is not usually the same thing as maximizing revenue. Therefore‚ while it may be appealing to think about the relationship between price and revenue‚ especially since the concept of elasticity makes it easy to do so‚ it’s only a starting point for examining whether a price increase or decrease is a good idea. If a decrease in price is justified from a revenue perspective‚ one
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Chapter 5 DEMAND ANALYSIS QUESTIONS & ANSWERS Q5.1 Q5.1 Is the economic demand for a product determined solely by its usefulness? ANSWER No‚ two basic conditions must be met before economic demand is created. First‚ there must be value associated with acquiring and using the good or service. For individuals‚ this value is in terms of utility‚ well being‚ or satisfaction through consumption. For firms‚ this value is measured in terms of the profit created through resource employment. Second‚ there
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