Master Card has a series of cute commercials that list a series of accounting items and costs leading to a priceless product. Cell phones are often advertised as being free. In economics, it is said that nothing of value is either free or priceless, everything has a price. Take something from your experience, that is allegedly free or priceless and use the concepts of accounting costs, economic costs, explicit costs, implicit costs, opportunity costs and sunk costs to explain why it is neither priceless nor free.
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This is a classic question that gets at the idea of opportunity cost. Suppose that I got a free ticket to the Sunday afternoon football game in Seattle. 50 yard line seats nonetheless! How I get the ticket is not important. I may have signed up for a credit card, or filled out a survey. My first ...
Solution Summary
The following is a discussion of opportunity cost. The narration demonstrates how in economics even things that are advertised as free actually are not. It covers the concepts of accounting vs. economic costs, explicit vs. implicit costs, opportunity and sunk costs.
... terminology, comment on each of the cost figures mentioned in the preceding discussion. ... $14,000 is an opportunity cost since this income will be lost if the ...
Finance Discussion Questions. ... 4. has no opportunities for positive NPVs in either capital expenditures or in financing. ... 1. reduce costs or increase subsidies. ...
... looking for answers to discussion questions of ... retaining funds for reinvestment carries an opportunity cost. ... of approximating the opportunities for alternate ...
The following discussion based on Gabriel Kahn, "Made to Measure: Invisible Supplier ... Discuss how this illustrates the concept of the opportunity cost of capital ...
Please see attached file. a. Chapter 15: Discussion Questions 9-11, 17, and 19. ... Opportunity costs are relevant if the opportunities are different between or ...
... When evaluating strategic opportunities the firm does evaluate ... www.wisegeek.com/what- is-opportunity-cost.htm www ... provides you an excellent discussion on Cost...
