AB 224 Unit 1 Assignment

AB224 Unit 1 Assignment Template:

Name: –

Course Number: – AB224

Section Number: – 02

Unit Number: – 1

Date: –

———————————- General Instructions for all Assignments———————————–

1. Unless specified differently by your course instructor, save this assignment template to your computer with the following file naming format:

Course number_section number_LAST_FIRST_ unit number

2. At the top of the template, insert the appropriate information: Your Name, Course Number, Section Number and Date

3. Insert your answers below, or in the appropriate space provided for in the question. Your answers should follow the APA format with citations to your sources and, at the bottom of your last page, a list of references. Your answers should also be in Standard English with correct spelling, punctuation, grammar, and style (double spaced, in Times New Roman, 12-point, black font). Respond to questions in a thorough manner, providing specific examples of concepts, topics, definitions, and other elements asked for in the questions.

4. Provide a list of references at the end of the last page of your assignment.

5. Upload the completed assignment to the appropriate dropbox.

6. Any questions about the assignment, or format questions, should be directed to your course instructor.

——————————————- Career Competencies —————————————–

In this assignment, you will engage in developing the following career competencies:

Analyzing Quantitative Data

Analyzing Qualitative Data

Improving Global Awareness

——————————————- Assignment ——————————————-

1. Liza needs to buy a textbook for the next economics class. The price at the college bookstore is $65. One online site offers it for $55 and another site, for $57. All prices include sales tax. The accompanying table indicates the typical shipping and handling charges for the textbook ordered online.

a. What is the opportunity cost of buying online instead of at the bookstore? Note that if you buy the book online, you must wait to get it. (Be sure to define opportunity cost and cite it correctly.)

Opportunity cost is the cost incurred or benefits of a course of action that are lost when one decides to take a competing alternative course of action (Lal & Srivastava, 2009). They are the benefits one decides to give up by virtue of choosing an alternative action from that which comes with those benefits. In this case, Liza’s opportunity cost if she decides to buy the book online is that she’ll need to wait. Buying the book in a bookstore will give her the privilege of getting the book immediately so that she can start reading it. Buying the book online will force her to give up having the book immediately, because whatever the shipping method she will choose, she’ll have to wait for at least one day for her to get the book. The opportunity cost in Liza’s case if she decides to buy the book online is the urgency at which she would have gotten the book with if she otherwise had decided to buy it in the bookstore.

b. Show the relevant choices for this student. What determines which of these options the student will choose? (There are several choices, so be sure to list all of them.)

She has several choices, depending on how fast she wants the book and the money she has. If she needs the book urgently, then she will need to pay $65, a considerately high amount buy, the book in the bookstore. This will make sure that she gets the book immediately. Another option is to spend the least amount of money ($58.99), which is the cheapest site’s cost of the book-$55 plus an additional $3.99 for shipping. However, she will have to wait longest, somewhere between 3-4 business days for shipping. Another option is to wait for 2 days for the book to be delivered, which in turn will cost a little more than the previous option, which is $63.98 for the first website, and $65.98 for the second website, which is $0.98 more than buying the book in a bookstore. The last option, and the most expensive one is to have the book shipped by Next-day air shipping method which will cost a whopping $68.98 for the first website and $2 more for the second website.

2. In August 2007, a sharp downturn in the U.S. housing market reduced the income of many who worked in the home construction industry. A Wall Street Journal news article reported that Wal-Mart’s wire-transfer business was likely to suffer because many construction workers are Hispanics who regularly send part of their wages back to relatives in their home countries via Wal-Mart. With this information, use one of the principles of economy-wide interaction to trace a chain of links that explains how reduced spending for U.S. home purchases is likely to affect the performance of the Mexican economy. (Be sure to list the principle, and cite it correctly.)

Macroeconomics is concerned with the study of the whole economy in general. The Market wide interactions principles that underlie the interactions of individual choices. The principles that govern market wide interactions tell us why, in this case, a downturn in the American economy will affect the economy of Mexico. One of the principles states that one person’s spending is another’s income. This basically means that as people spend, others earn what the others are spending. There are so many businesses in the U.S. that are owned by Hispanic people. Since they are in the U.S.A, the spenders are Americans, and these Hispanic people send money back to their countries, which mainly is Mexico. Since these earnings contribute to a large extent the economy, an economic downturn in the U.S will automatically affect the Mexican economy. This is because this downturn will reduce the spending power of Americans who buy things in the Hispanic people’s businesses. Consequently, the Mexicans won’t earn what the consumers were supposed to spend. This will mean that the income Mexico earns from that will reduce, thereby affecting their economy.

3. During the Great Depression, food was left to rot in the fields or fields that had once been actively cultivated were left fallow. Use one of the principles of economy-wide interaction to explain how this could have occurred. (Be sure to list the principle, and cite it correctly.)

In Economics, it is important to note that the overall spending of an economy sometimes may get out of line with that economy’s productive capacity (Baumol & Blinder, 2008). This is the principle that explains why food had to be left to rot in the fields and the once cultivated fields were left to fallow during the great depression. In the great depression, the economy’s capacity was too low to take up all the food, as people didn’t have the buying power to buy all the food in the fields at that time. When the supply and demand of an economy is at equilibrium, mainly the economy of that country is at its best. During the great depression, the world didn’t have the capacity to buy the food, simply because the supply of food was more than the demand, mainly because the people didn’t have the capacity to buy the food.

——————————————–

References:

Baumol, W., & Blinder, A. (2008). Macroeconomics: Principles and policy (10th ed.). Australia:

Thomson/South-Western.

Lal, J., & Srivastava, S. (2009). Cost accounting (4th ed.). New Delhi: Tata McGraw-Hill.