Opportunity Cost is vital to economics as it emphasized the cost of decision making.
Decision making is determined by weighing the costs and benefits for each choice.The picture in the previous slide emphasizes this concept, would you choose the four year college tuition, or the two free puppies.
Should one decide to accept the four year tuition to a university, one would be able to obtain a degree debt-free, providing jobs and financial security. The opportunity cost of accepting the tuition is the loss of love and comfort he puppies provide
If one was to choose the puppies, comfort and love would be a benefit gained by doing so, yet the opportunity cost of the puppies would be a lack of education.
Defined as the next best alternative given up due to making a decision.
1. Does opportunity cost impact every decision one makes in life even on an emotional level?
2. Why Is the opportunity cost of foregoing a traditional education worth investing time in learning a skill or trade in the modern world?
Dimensions of Microeconomics:
Dimensions of Economics:
Consumer choice is subjective. The utility the main character receives from his iphone differs from the utility that almost everyone else in the video expresses.
The Android is advertised as having better storage, a better camera, and more durable compared to the iphone.
Therefore a majority of the consumers within the video prefer samsung.
Consumer choice refers to the decisions one makes in regards to products and services.
The video portrays the ongoing battle of consumer choice between the iphone and the samsung Galaxy.
The utility provided by the android users in the video greatly exceeds the utility which the iphone offers.
How much of an impact does brand loyalty play into consumer choice?
Why would consumers decide to switch to an inferior product?
Market Structure, Resource Allocation, and Regulation
Baig, Edward C. “DOJ Claims Judge Lacked 'Common Sense' in Appeal of AT&T-Time Warner Merger.” USA Today, Gannett Satellite Information Network, 7 Aug. 2018, www.usatoday.com/story/tech/2018/08/06/judge-ignored-common-sense-approving-t-time-warner-merger-doj-says/918647002/.
A vertical merger is a purchase of companies at all levels of an industry. Vertical mergers therefore allow a single company to control the entire production costs.
The of AT&T and Time Warner is significant because it allows AT&T to control the costs of production while also controlling the price of subscriptions such as HBO and CNN.
AT&T merging with Time Warner caused political intervention by the department of Justice due to the power the merger will give to AT&T over other producers in the industry. AT&T argued that the merger will not only allow them to lower costs but also compete with other companies such as Facebook or Netflix.
Market Structure, Resource Allocation, and Regulation
Both companies will act separately still but are expected to report to AT&T CEO. Allowing the CEO to be in control of production and distribution eliminates bargaining while maximizing profit company-wide.
Does this merger truly create a monopoly?
Will other industries seek to follow in AT&Ts footsteps if the merger is upheld?
Labor Resources and Environment: Outsourcing
Labor Resources and Environment
Outsourcing American jobs facilitates an increase in unemployment and reduces the participation in unions.
American workers are statistically more displeased with the outsourcing of jobs than automating labor and influx of immigrant workers.
Outsourcing to independent contractors is more beneficial to companies as it allows them to reduce costs by eliminating employee benefit costs.
American workers are steadily growing more displeased with the amount of outsourcing companies have been participating in.
Outsourcing is defined as the firms employment of labor outside the firms country.
Outsourcing provides a market for specialization within the workforce that increases global trade yet decreases American jobs.
Outsourcing of jobs causes an increase in GDP and a higher demand for US products.
Increased outsourcing of jobs also increase the demand for foreign products in the United States.
How does outsourcing effect GDP?
Can automation of jobs be considered the outsourcing of the age of information?
A Tariff is a tax on imports and exports between nations.
President Trump has created tariffs in order to strengthen the steel industry in the United States
Although tariffs protect domestic industries, they also inflate the prices of the good causing increased costs and price of goods.
Trade wars are economic barriers enacted by nations in response to tariffs placed on goods.
The imposed tariffs caused a minimal increase in US steel while causing the stock market to plummet due to fear of trade wars.
Because Trump implemented the steel and aluminum tariff, many other countries have responded by implementing their own tariffs.
Placing Tariffs on basic goods used in production hinders beneficial economic growth worldwide.
President Trump is harming the economy with these tariffs because it affects allies of the United States, such as Mexico and Canada, who are major exporters of steel.
How do Tariffs protect infant industries?
Why do tariffs often cause an increase in prices on the taxed good?
Learning and understanding the importance of opportunity cost has influenced my thought process and caused me to think twice about decisions and their consequences.
What Impacted my Decision making the most
Understanding about substitutes has allowed me to develop a deeper understanding of personal choices when applied to spending
Questions I have after this course
Are there any efficient and fair solutions to the poverty crisis?
How will tariff wars affect the economy in the long run?