Economics and Opportunity Cost

 Economics and Opportunity Expense Essay

Four Valuable Economic Concepts

Commerce 394: Government and Business Keith Head Sauder School of Business January 7, 2013

Lecture 2: Learning Goals

After reading Brander Part 2 and attending this lecture, learners should know the right way to Apply the 4 concepts, opportunity expense, marginalism, offers, and efficiency to the two daily life and government coverage. Identify which concepts are relevant the moment reading content in the information. use the marginalist diagrams anticipate and examine incentive concerns associated with government policies.

The situation of Jericho Garrison

The 39 Canadian Brigade Group is headquartered at the Jericho Garrison on West fourth Avenue. The following is a real publishing from forums. army. florida: As I was passing by simply there the other day with my own buddy... we all started talking about how the garrison is seated on some pretty primary real estate. The right in a very posh area of vancouver down there. My issue is (and forgive myself if it seems stupid) is the reason why the heck doesn't the CF, which owns this massive amount of primo real estate in vancouver, promote the area, make a kiiling, build a new foundation on more affordable land even more out of the city and maybe help to make a decent profit... I know it would take a while to do something like that, but if the VOIR is strapped for cash like that they always say they are, then obtain look at innovative ways of making some cash... the land they will occupy in Jericho is worth a fortune...

Jericho Garrison

i> Clicker Quiz: Jericho Fort

Which economical concept is most relevant inside the posting?

A B C D

Opportunity Cost Marginalism Incentives Efficiency

Opportunity Expense

Textbook Definition: the value of the best foregone substitute Another Definition: The opportunity expense of X may be the amount of Y abandoned to receive X, where Y is the best alternative to Times.

i> Clicker Quiz: Opp. cost example

Example: Your rich great aunt gives you one-hundred dollar to spend in NYC. Broadway shows price $98. Films cost $14. What is the ability cost of the Broadway present?

A W C M E

Absolutely no 14% of the movie. 14 movies. 7 movies. Insufficient information to answer.

i> Clicker Quiz: Opp. cost case

Suppose you spend $98 on the ticket. After arriving at the stadium, you realize you did not remember the admission at home. There is absolutely no time to get it. Someone offers to sell you a admission for $126. Movies (at $14 each) are still the next best substitute.

What is the ability cost of the Canucks video game?

A W C Deb

Zero several movies being unfaithful movies 16 movies

Prospect versus " accounting” costs

Units of measurement differ Opportunity costs EXCLUDE sunk costs. Canucks game case in point (previous iClicker question)

Opportunity costs CONTAIN costs which is why there is no seen outlay. Parent or guardian lets university-student continue to live at home. Finding a (full-time) MASTER OF BUSINESS ADMINISTATION. Jericho Fort.

2013-01-06

4 Useful Monetary Concepts

Prospect versus " accounting” costs

Units of measurement differ Opportunity costs EXCLUDE sunk costs. Canucks game case (previous iClicker question)

Chance versus " accounting” costs

Opportunity costs INCLUDE costs for which there is not any observed outlay. Parent enables university-student still live in the home. Getting a (full-time) MBA. Jericho Garrison.

respectively the no-outlay costs are foregone rent to father and mother (or reduced interest by downsizing to a house with one fewer bedroom), foregone salary, foregone rent/sales income. Another interesting example is the fallacy of assured source. Suppose you are air carrier worried about price of oil so that you buy a great oil well and refinery to be sure a person pay substantial market cost of oil. but even so you will the opportunity price that you could sell off that essential oil at a high price.

i> Clicker Quiz: Jericho Beach Park?

Should we follow the same logic while before then sell the area for real estate property?

A W C Deb

Yes, the economic reasoning is mind-boggling. Yes, and Stanley Recreation area should be offered off too. No, the Garrison land should be private residential, nevertheless the park...

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