Economics homework help
1) what is the significance of opportunity cost to the nation. what is the significance of opportunity cost to a firm wishing to expand. what is the significance of opportunity cost to to a government controlled industry. 2) examples of economic choices made by the government, a large multinational industry and an individual
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opportunity cost is defined as the next best alternative foregone when a choice is made. For example, if you've got
10 March 2011
So the significance of opportunity cost to the nation is, for example, the opportunity cost arising from choices made by the government. So if the government chooses to spend
10 March 2011
The opportunity cost of a firm wishing to expand is the money that it spends on expansion that it could use on, for example, advertising or improvements in their capital stock. The firm has to decide where best to spend its money and whether this money would be better spend elsewhere.
10 March 2011
The opportunity cost to a government controlled industry is the benefits it could gain from privatization. The government has to decide whether it will gain more from keeping the industry nationalised and keeping the profits for the nation, or whether it would gain more from selling it into the private sector and receiving a lump sum of cash now.
10 March 2011
Examples of economic choices made by the government is how it chooses to spend tax payers money so what proportion to spend on healthcare, defence, education, housing, judiciary etc
10 March 2011
Economic choices made by a large multinational would be where best to set up business (in which countries) in order to make the most profit given that they have a limited amount of resources to use to expand.
10 March 2011
Great answer
10 March 2011
Economic choices made by individuals are ones which you and I make every day given our budget constraint of how much we earn (or how much pocket money we get!!) So I might make a choice to spend most of my money on shoes and not that much on CDs whereas my friend might choose to spend most of his money on video games and only a small proportion of it on food.
10 March 2011
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