Questions and Answers on Managerial Economics

Questions and Answers on Managerial EconomicsIntroductionThis assignment is about the contrary prospective of managerial frugals. In which luck make up, a soulfulness finish avail that hail by utilise the same resources. Choosing margin helps state to get a little bettor involvement then the some other acquirable options as it unremarkably ignore the drop equal. orchard apple tree comp both is one of the leading organization that introduce the app shop class available in iTunes is vibrant, extremely competent, and evolving digital market place. All the apps are user friendly and come out fine-looking within and outside the app store. Later on the PPF curve is discussed that shows maximization of take direct and goodness those results for economic based concepts.Task 1Explain wherefore luck live is the best for gone substitute and provide examples of some prospect costs that you fool characterd today.Opportunity costOpportunity cost is the cost that a per son gives up in outrank to buy a thing he wants to buy. As opportunity cost is the cost that a person can avail by using the same resources. In delivery, whenever the word cost is use it convey that economist is talking about opportunity cost. The opportunity cost is the cost that a person gives up so it is the second highest value of alternative that the person leaves in ordinate to gain the first better opportunity (Zhang, 2013).Examples contemplate a person decided to buy a computer but he can buy different other things by using the same resources. He could choose to spend his money for purchasing books, can coif a tour, whichever option suit a person. If he decided to purchase a computer or else of all above things then the other options are the opportunity cost. As he left the opportunity to buy them in order to buy the computer.It fancys the logic that the person decided to buy one thing by spending his resources instead of buying anything else. Another example is that for most of the college students, the college and tuition fee is not the actual cost. The opportunity cost of the student is the time they spend on college instead of doing any preserve (Puangsri, 2009).Task 2Explain what it means to choose at the margin and illustrate with three choices at the margin that you have made today.In economic science choosing at the margin means that one spare more unit of any resource utilise. Choosing at margin means, that person is carrying out an incremental limiting or a kind of adjustment in action plan. Choosing margin helps people to get a little better thing then the other available options as it normally ignore the sunk cost (Okullo, 2013) .Example of choosing at marginfor example the benefit a person get by eating one excess bar of chocolate, each additional bar of chocolate gives you less level of satisfaction. Another example of choosing at margin is that if a theater is facing the problem of empty seats. consequently they should sell tickets at half rates by bargaining with their customers. This leave alone help them to get half price instead of gaining zero. It lead add the overall revenue of the theater as they collect 50% of the amount of money of ticket instead of getting nothing that annex their overall revenue.In case of any airlines, if the airplane takes off with some empty seats, they face lose of those empty seats as it stifle the overall revenue. Therefore, the solution to the issue was to reduce the price of the tickets. As reducing, the price of the ticket can append the sale of ticket. It will help to change magnitude the overall revenue of the airlines (SIVA, DANIEL, SHALINI*, April, 2013).Task 3Apple data processor Inc. decides to make iTunes freely available in unlimited quantities.a. How does Apples finality throw the opportunity cost of a download?The resources are scares now a day but the wants of people are unlimited. The app store available in iTunes is vibrant, extremely comp etent, and evolving digital market place. Proper strategies made in order to make and mange in order to provide comfort to the employees.The decision made by apple can lessening the opportunity cost of iTunes if they reduce the monetary cost by 99c that previously settled per iTunes. The iTunes store is now one of the most famous musical stores. ITunes, offers almost 10 million songs, on 30000 episodes of TV serials in different channels, with outclass video quality (GREGERSEN, EL LAKANY, KARSENTY, WHITE).b. Does Apples decision change the incentives that people face?Yes, the incentives of providing free latest music available on iTunes have increased the decision of people. As it, encourage people to buy new iPods. The apps made by apple are stringently on merit with regard of their quality for the purpose of promotion. All the apps are user friendly and seem beautiful within and outside the app store. The apps are available in almost 150 countries in order to provide customers with better facilities. It help customer to localize their apps according to their requirements.Many international musical brands handle EMI, Warner musical brand, universal musical group, etc decided to offer their music in iTunes. iTunes provide a better quality of audio music, the 3G user of iphone can now get iTunes catalogue of music on iPhone 3 3G by the help of 3G network (FREDERICK, NOVEMSKY, WANG, DHAR, NOWLIS*, 2009).c. Is Apples decision an example of a microeconomic or a macroeconomic issue?Macroeconomics is the study of economic in which the national economy discussed and the economy of land discussed. Like the reason of the increase in the unemployment in a particular year. The microeconomics deals with the choice made by individualists or a business that interact in market. As it help to determine the reason of why people buy more mobile phones. From above definitions, it is clear that the decision made by Apple Company is a micro economical issue as it deals with a single market and concern to a single company (WEAVER FREDERICK*, 2012).Task 4Why do the PPF bow outward and what does that predicate about the relationship between opportunity cost and the quantity letd?The ware scuttle frontier used in economics, which determine the business curves, boundaries and products formative curves. This graph used to determine the comparison of rate of exertion and commodities used as a fixed production factors. The PPF curve shows maximization of production level and commodity those results for economic based concepts. The PPF is a curve bow outward out-of-pocket to result of change in economic determinants such as scarcity of resources, economic of shield in production, and efficient of production. The PPF shows maximum gang of two different products that has produced on basis of available resources (MIKAMI, 2013).The PPF used to illustrate the raise in scarcity of resources. There are different charge ups that technically determine efficie ncy. The opportunity cost related to different activities is highly valuable which alter the engagement of different activities with opportunity cost. Opportunity cost related to increase in margin as well as increase possible frontiers, which bowed towards straight line due to increase in production. Economies of scale will increase production as well as increase additional resources with activities. The importance of PPF is used to decide the resource of opportunity cost therefore, opportunity cost determine through cost of giving up which is need for production. It demonstrate that opportunity cost ensure the individual which at least determine the good with great choices.Task 5Economic dumbfoundth illustrated by shifting a production possibilities frontier outward.Use the following information to answer questions 5 to 7.brazil nut produces ethanol from sugar, and the land used to grow sugar cane used to grow food crops. Suppose that brazil nuts production possibilities for eth anol and food crops are as in the table.a. Draw a graph of brazil is PPF and explains how your graph illustrates scarcity.There is the comparison of barrel and heaps in Barazil, the PPF shows that optimal point on frontier (40, 3).Productivity possibility frontierThe PPF curve illustrates that production possibility determine an economy with combination of two goods one is food in lots and other is ethanol production. Ethanol production is less than the production of food in an economy of Barazil. A production possibility frontier represents a specific boundary of capabilities of economys production therefore it is possible to term the production possibility frontier. The PPF maximize the production at fixed resources in an economy with fully employed resources. The production means that resources are unemployed and increase opportunity cost with given curve of convex shape mirror.If brazil nut produces 40 barrels of ethanol a day, how much food must it produce to achieve produc tion efficiency?According to the PPF, 40 barrels of ethanol a day there must have 3 lashings per day of food that produce to achieve the efficient frontier. The opportunity cost of producing the goods and serve which used to achieve the benefits of producers within a orbit. The cost of production is based on products and services because economies of scale known as managerial cost. Allocation of efficiency maximizes the managerial benefit with equal or limited units of production.Why does Brazil face a tradeoff on its PPF?Brazil faces tradeoff on its PPF because resources of Brazil are limited as well as technology. For the production of Brazil goods it is more important to produce the economies of scale with changeable factors of production. The way to develop goods and services helps to increase production capacity and increase goods that required decrease production of goods and also required to increase goods production with tradeoff reflection.Task 6a. If Brazil increases i ts production of ethanol from 40 barrels per day to 54 barrels per day, what is the opportunity cost of the additional ethanol?According to the production of Brazil there will an efficient increase in production which will entirely produce ethanol from 40 barrels per day to 54 barrels per day, which decrease production of food as per crops from 3 tons per day to 2 tons per day. Therefore, opportunity cost of one ton ethanol for per day is 14 barrels or 1/14 ton of food for per ethanol barrel.b.If Brazil increases its production of food crops from 2 tons per day to 3 tons per day, what is the opportunity cost of the additional food?When Brazil efficient to increase its production from 2 tons per day to 3 ton per day then production of barrel will decrease by 14 as well as opportunity cost of additional food will be 14/1. Opportunity cost helps to determine what will forgo in return to get a new one opportunity. As Brazil increase production of food due to decrease in barrel of ethano l. Forgoing cost of ethanol is opportunity cost against getting the extra food tons for county promotion.What is the relationship between your answers to parts (a) and (b)?There is negative relationship between production of foods and barrel, as increase in production of foods barrel production will decrease. Increase in production of food will decrease ethanol production with more value than food production.Task 7Does Brazil face an increasing opportunity cost of ethanol? What feature of Brazils PPF illustrates increasing opportunity cost?The increase in opportunity cost of ethanol will decrease production of food. Food is obligatory item, for increase in production can easy to sacrifice the ethanol production. Economy will grow when necessaries will fulfill and due to unavailability of land increase in production as well. graph illustrated that from point A it will decline and comparison at 40 barrel of ethanol will decrease one tone food. The increase in production will increas e growth of country with suitable level of economies of scale. There are few managerial economic contents, which determine opportunity cost asThe marginal cost of food for 2 tons is equal to the cost of 54-barrel ethanol.Increase in production will sometime decrease benefits for whole economyEfficiency cost helps to achieve the amount of goods and managerial benefits from production through available resources.Economic growth will illustrate the PPF and also increase rate of opportunity as wellFor economic production, there is lot of opportunities, which helps to increase tradeoff as well as increase specialized products.Price adjusted to make decision and determine different factors for market promotion university extensionsFREDERICK, S., NOVEMSKY, N., WANG, J., DHAR, R., NOWLIS*, S. (2009). Opportunity Cost Neglect. JOURNAL OF CONSUMER RESEARCH, Inc. -, 36, 9. Retrieved from http//faculty.som.yale.edu/ravidhar/documents/OpportunityCostNeglect.pdfGREGERSEN, ,. H., EL LAKANY, H., K ARSENTY, A., WHITE, A. (n.d.). Does the Opportunity Cost Approach. 23. Retrieved from http//www.rightsandresources.org/documents/files/doc_1555.pdfMIKAMI, M. (2013). Evolutionary foundations of Coasean economics. Erasmus Journal for Philosophy and Economics,, 6(1), 164. Retrieved from http//ejpe.org/pdf/6-1-ts-1.pdfOkullo, S. J. (2013). Economic modeling of the long-term. 199.Puangsri, ,. M. (2009). QUANTIFIED RETURN ONINFORMATIONSECURITY INVESTMENT. 96 Retrieviewed http//www.tbm.tudelft.nl/fileadmin/Faculteit/TBM/Over_de_Faculteit/Afdelingen/Afdeling_Infrastructure_Systems_and_Services/Sectie_Informatie_en_Communicatie_Technologie/medewerkers/jan_van_den_berg/news/doc/PANCHIT-MASTER-THESIS.pdfSIVA, S., DANIEL, M. J., SHALINI*, S. (April, 2013). A nurture ON MARGINAL COSTING IN GODREJ CONSUMER. Asia Pacific Journal of Marketing Management Review__, 2(4), 2836. Retrieved from http//indianresearchjournals.com/pdf/APJMMR/2013/April/7.pdfWEAVER, R., FREDERICK*, S. (2012). A Referen ce Price Theory of the Endowment. Journal of Marketing Research, XLIX, 707. Retrieved from https//economics.stanford.edu/files/Frederick11_26.pdfZhang, N. (2013). CULTURAL DIFFERENCES IN OPPORTUNITY COST CONSIDERATION. 52. Retrieved from http//qspace.library.queensu.ca/bitstream/1974/8137/1/Zhang_Ning_201307_MSc.pdf.pdf1