Opportunity cost - Meaning, examples, how it affects managerial decisions; Law of variable proportion; Elasticity of demand - meaning, types and degrees; Difference of demand and s... Opportunity cost - Meaning, examples, how it affects managerial decisions; Law of variable proportion; Elasticity of demand - meaning, types and degrees; Difference of demand and supply; Essence of demand; Interdependence between micro and macro economics; Diseconomies of scale - internal and external reasons.
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The text appears to list various economics topics and concepts, indicating a potential need for definitions, explanations, or applications of these topics in an academic context.
Answer
Opportunity cost affects managerial decisions by highlighting trade-offs. Laws: variable proportions show input-output relations; elasticity measures demand response types. Demand vs. supply: Different economic balances. Micro-macro interdependence: Mutual effects. Diseconomies: Production inefficiencies raise costs.
Opportunity cost refers to the value of the next best alternative forgone when making a decision. It influences managerial decisions by encouraging efficiency and cost-benefit analysis. The law of variable proportions shows the effect of varying one input while keeping others constant. Elasticity of demand measures how quantity demanded responds to price changes, with types including price, income, and cross elasticity. Demand differs from supply, which is the quantity producers are willing to offer. The interdependence between micro and macroeconomics involves their mutual influence on overall economic scenarios. Diseconomies of scale occur when increased production leads to higher costs, due to factors like inefficiencies and resource limitations.
Answer for screen readers
Opportunity cost refers to the value of the next best alternative forgone when making a decision. It influences managerial decisions by encouraging efficiency and cost-benefit analysis. The law of variable proportions shows the effect of varying one input while keeping others constant. Elasticity of demand measures how quantity demanded responds to price changes, with types including price, income, and cross elasticity. Demand differs from supply, which is the quantity producers are willing to offer. The interdependence between micro and macroeconomics involves their mutual influence on overall economic scenarios. Diseconomies of scale occur when increased production leads to higher costs, due to factors like inefficiencies and resource limitations.
More Information
Opportunity cost is central in decisions, ensuring resources are directed toward the most value-generating activities. Elasticity helps businesses set prices strategically, and understanding diseconomies of scale ensures optimal production levels.
Tips
A common mistake is confusing opportunity cost with accounting costs. Focus on potential gains from the next best option, not just financial expenditures.
Sources
- Opportunity Cost: Definition, Formula, and Examples - Investopedia - investopedia.com
- Opportunity Cost Explained with Examples (Foundational Economics) - youtube.com
- Real-Life Examples of Opportunity Cost | St. Louis Fed - stlouisfed.org
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