high-quality audio systems. A partial income statement for Sound Devices‚ Inc‚ is show below: Revenues 2007 Revenue from sales of product and services $970‚000 Operating costs and expenses Cost of products and services sold 355‚000 Selling expenses 155‚000 Administrative expenses 45‚000 Total operating costs and expenses $555‚000 Income from operations $415‚000 Interest expense (bank loan) 45‚000 Legal expenses to start business 28‚000 Income taxes 165
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Micro vs. Macro Economics Micro-indiidual consumers/firms Macro-economic aggregates-GDP‚ inflations‚ unemployment Markets-opportunity for exchange 1) Opportunity Costs-value of the next best for gone alternative when a decision is made -all decisions involve an opportunity cost (assuming the firm operates efficiently) 2) Marginal Analysis-analyze situations involving incremental change -marginal: something is changing by a small amount (incremental/one-unit change) 3) Laws of supply and
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funding of receivables is less than the cost of funds raised to finance that additional credit. Granting of credit and its management involve costs. To maximize the value of the firm‚ these costs must be controlled. These thus include the credit administration expanses‚ b/d losses and opportunity costs of the funds tied up in receivable. The aim of credit management should be to regulate and control these costs‚ not to eliminate them altogether. The cost can be reduced to zero‚ if no credit is granted
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chapter‚ you should be able to 1. Describe a five-step sequence in the decision process 2. Distinguish relevant costs and revenues from irrelevant costs and revenues in any decision situation 3. Understand the difference between quantitative factors and qualitative factors in decisions 4. Identify two potential problems in relevant-cost analysis 5. Describe the opportunity cost concept; explain why it is used in decision making 6. Describe the key concept in choosing which among multiple
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of inductive methods in economics when discussing theories. 9. # Briefly outline the law of increasing opportunity costs. Use a production possibility curve to illustrate your answer. The law of increasing opportunity cost states that as you produce more of one type of good‚ the opportunity cost of producing it increases. This is due to the assumption that there are increasing costs for using resources which are better suited at producing another good. For example‚ taking a worker who is better
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ECO 561 Week 2 Discussion Question 4 you will find the next information: As a student‚ what opportunity costs do you confront by enrolling in University of Phoenix’s MBA program? Does your organization or an organization with which you are familiar consider opportunity costs when evaluating strategic opportunities? For your organization‚ are opportunity costs fixed costs‚ variable costs‚ both‚ or neither? Economics - General Economics ECO 561 Week 1-6 Everything Icluded (All Assignments
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competitive environment‚ customers are not price takers. There are various comparable motels so George Alward can simply take his business to the competition. Possibility for repeat business: If McGregor accepts the offer he will create an opportunity for possible repeat client next year during slow season. And since Alward is a respected member of the
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shown by the existence of some unattainable bundles of goods. Choice: Because of scarcity‚ societies must somehow choose how resources are to be allocated; thus a particular point on the PPB must be chosen. Opportunity Cost: The slope of the PPB is negative‚ revealing the opportunity cost that is unavoidable every time a choice is made. For the economy as a whole‚ the decision to produce more of one good must involve a decision to produce less of some other good. 2. Consider an economy that produces only food and clothing
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frontier‚ it is the maximum production possible given existing (fixed) resources and technology. Producing on the curve means resources are fully employed‚ while producing inside the curve means resources are unemployed. The law of increasing opportunity cost is what gives the curve its distinctive convex shape. Production Possibilities Curve Production Possibilities Curve Production possibilities is an analysis of the alternative combinations of two goods that an economy can produce with existing
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it was a very wide release making them readily available‚ for a day or two anyway. The only problem with this products was affordability‚ the price of the product itself was not out of reach for most working adults‚ the problem came with the opportunity cost for the individual‚ what they would have to give up to get one. In the case of the iPhone the volumes have dictated‚ to an extent‚ the price of the product or price decline‚ and in return the price has effected the volume. Apple announced
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