“Marginal analysis involves changing the value(s) of the choice variable(s) by a small amount to see if the objective function can be further increased (in the case of maximization problems) or further decreased (in the case of minimization problems)” (Thomas & Maurice, 2012, pp. 91). Marginal analysis is known as “the central organizing principle of economic theory” for its importance and applicability to many aspects of our daily lives as well as our careers (Thomas & Maurice, 2012, pp. 94). The key concepts of marginal analysis include total benefit, total cost, marginal benefit, marginal cost and net benefit. These concepts all come together to play a significant role in the use of marginal analysis to reach the optimal desired outcome.
Net benefit is highly important in the understanding of marginal analysis. While using marginal analysis, the decision maker is seeking to receive the maximum net benefit from the activities being performed. Net benefit can be calculated by subtracting the total cost of a level of activity from the total benefit of that level of activity. The optimal level of activity is identified as the “level of activity that maximizes net benefit” (Thomas & Maurice, 2012, pp. 93). If you were to graph total cost and total benefit, the maximum net benefit would be represented by the widest point in
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Marginal cost (benefit) is the change in total cost (benefit) caused by an incremental change in the level of activity (Thomas & Maurice, 2012, pp. 95). In these definitions incremental is referring to small change relative to the total level of activity. Marginal cost is representative of the slope of the total cost curve and marginal benefit is the slope of the total benefit curve. The intersection of these two lines on a graph represent the point where the net benefit is maximized, or the optimal level of
From classroom to a cocktail party, having knowledge in today’s economics is definitely an asset when it comes surviving in the world of business. Cocktail Party Economics, by Eveline Adomait, and Richard Maranta undeniably satisfies as an economic training book, helping you understand the concepts of basic economics. The book brings to light many theories and thoughts, which are explained in a certain way that help readers easily, compare and relate them to each other. During the first couple chapters of the book, the main theories presented are scarcity, value, opportunity cost, production, and absolute/comparative advantage. Believe it or not, all of these theories are relatable to Supply and Demand; the two concepts introduced in chapters six and seven.
The graph above and off to the right represents the demand and marginal cost for a firm. In the retail market, they have control over the price at which they sell their products to consumers. In the article they state that the firms buy the pecans from wholesale markets for a small price, like eighty-five cents, and then they go off and sell the same pecans for $5.50. A decrease in the price causes a decrease in marginal cost.
A cost-benefit analysis is “whenever people decide whether the advantages of a particular action are likely to outweigh its drawbacks” (Benefit-Cost Analysis, n.d.). The analysis estimates the economic value placed upon a
The author, Katherine Mansfield, begins the story by introducing a simple- minded woman who is suffering from her loneliness, which is a reason why she eavesdrops into stranger’s life experiences. Miss. Brill’s life story is told to reveal how she attempts reflect her life with another stranger’s life, however it does mirrors Mrs. Brill’s life. On Sunday’s, Miss. Brill goes to the park and examines the details of her surroundings. Though the weather is call for it, she dresses in fur clothing, representing her personality. There was an old couple seating by her at a bench, and she is dissatisfied that they are not talking since she enjoys eavesdropping on their conversation. Her attention changes at the park when she notices a young girl trying to desperately get a man’s attention, but the young girl fails. Even though the girl seemed happy and hastily to progress, Mrs. Brill gives her attention to the sad music that is playing in the background. She believes to be more into the young girl’s emotions rather than the couple and their life conversations. Miss. Brill believes that she is an inspiration to everyone, and she and everyone else is a production of her life, but she is the main character. She believes to be the queen of this imaginary production, and she rules everything and everyone. As the music resumes, she moves away from the girl by a changing tune, which she is not able to comprehend. She is then joined by a young couple, who she believes is the star of her imaginary production. She over hears the young couple talking about her, so she leaves the park and immediately goes home and when she gets there she hears crying. The author, Kathrine Mansfield, demonstrates the central idea by using Miss Brill as a message of is...
To Kill a Mockingbird, the novel by Harper Lee embodies a work of Southern literature, set in the 1930s in a small town in Alabama. The book’s genre exemplifies a coming-of-age historical fiction story. The narrator, a young girl named Scout Finch, describes the lessons she and her brother Jem learn when their father, a lawyer named Atticus, defends an African American man who stands accused of raping a white woman. The novel’s premise revolves around the efforts of a father raising his children and guiding them in their moral development. Along the way, the book deals with the themes of courage, prejudice and maturity. These three concepts are defined differently by Atticus than by most of the other people in the town where he lives. According to Atticus, courage means doing what remains as right and resisting what remains as wrong, even if other people oppose you. In contrast to the prejudice of the townspeople, Atticus believes it important to treat everyone equally. Maturity, in Atticus’ view, refers to having a sense of conscience and seeking to protect those who remain innocent. As these definitions show, Atticus Finch displays a strong sense of ethics. His goal as a parent remains to pass his values on to his children. This paper will argue that Scout and Jem learn the true meanings of courage, prejudice and maturity through the influence of their father and the example he sets for them.
Author, physician, and anthropologist Paul Farmer focuses on structural violence in his book Infections and Inequalities. Structural violence is not only today’s social and economic inequality, but also oppression and exploitation that is ongoing and has been occurring for generations. Current programs to alleviate inequality are important but many people don’t consider that marginalized people are not only marginalized today, but their families have been marginalized for centuries. People argue that it has been a certain number of years since slavery and the civil rights, and are opposed to the continuation of programs to address disparities. Opposition to social programs such as welfare is widespread in America. But structural violence is not just about today’s staggering, undeniable, and increasing inequality, but about centuries of marginalization, that cannot be simply repaired. Structural violence is the exploitation and manipulation of poor or victimized people by powerful people and companies. A person’s lack of resources, both a cause and an effect of structural violence, is not only a lack of money, but also whether a government’s or health provider’s decides to make interventions available to some but not others, or to focus on prevention at the sake of cure.
The symbolism and imagery used in the short stories paints a vivid picture into the author’s train of thought. Charlotte Perkins Gilman and Shirley Jackson were not normal writers. The stories are a form of gothic writing. This paper will be analyzing the point of view, symbolism, and setting in the stories The Yellow Wallpaper by Charlotte Perkins Gilman, and The Lottery by Shirley Jackson.
Positionality as a concept is believed to be the general aspects that positions people within their immediate environments. This concept is aimed at viewing the way people see the world based on their different embodied locations. In general, positionality comprises of many dimensions of social identity, which has been instrumental in shaping our personalities within our immediate environment. Some of these dimensions of social identity which we are going to analyze in this paper include the following race, skin color, ethnicity, nationality, first language, gender, gender expression, age, sexual orientation, religious or spiritual belief system, ability, disability, and sense of place.
DeShawn's marginal benefit, if he sells a basic detailing package, is $75. The marginal cost of adding the engine detailing to the basic detailing package is $20. DeShawn should not continue to offer the engine detailing service because the marginal cost is higher than the marginal benefit. DeShawn gains $35 from a basic package and gains $30 from the upgraded package.
The purpose of this essay is to discuss how dualism describes reality more accurate than materialism, idealism, and transcendental idealism. Even though dualism doesn’t describe reality one hundred percent just like the other theories about the nature of reality, it is the most accurate argument out of the four major theories about the nature of reality and substance. Dualism was a concept that was not originated by Rene Descartes but coined by him. The concept was that our mind is more than just our brain. The concept was not originated by Rene Descartes because the Bible explains that we are more than our body and brains. It teaches that we have a separate mind, soul, and spirit. One argument for dualism is that the physical and mental territories have different properties. The mental events have qualities such as what does it feel like, what does it look like, or what it sounds like. Another argument is the lack of any understanding of how any possible reaction can take place between the mind and brain. The essay will include reasons for favoring the Thomistic and Cartesian forms of substance dualism and the counter arguments that are against them.
Term “marginal” is extensively used and known with reference to the economics which means “extra”, whereas with economic view point the marginal cost is the cost of producing every extra unit; however the accounting terminology of “marginal” defines the cost incurred on production other than its fixed cost is the marginal cost. Simply, none of the technique is applied unless it serves the benefits and the marginal costing is used by the firms for its registered benefits. Among all its benefits the primary advantage it serves is its attempt to distinguish the fixed and variable costs, and the method only considers the related variable costs to be included in production cost and the fixed costs are thus later deducted out for ascertaining net profit. The inventory at the year-end is also valued on the bases of variable cost. With all these beneficial characteristics of the said system firms using marginal costing are clearly aware of its ...
Cost-benefit analysis is an economic approach decision making that compares the strengths and weaknesses of each choice in order to determine which option will provide the most amount of benefits and the least amount of costs. This method is often applied to decisions that concern the environment as an attempt to determine the value of the environment before following through with decisions to preserve or utilize the environment for resources. Although many economists believe that cost-benefit analysis is an efficient way to make most decisions, some philosophers suggest that certain things, including the environment, have innumerable values, therefore, cost-benefit analysis may not be a reliable method to make decisions regarding these things.
Where x is the quantity/output, Ci is the total cost, and U is the utility. A firm's action can have a substantial effect on the other.
For instance, if a business wants to produce 5,000 more t-shirts, yet it will require the purchase of another machine, the marginal cost for the extra t-shirts includes the cost of the new machine. A marginal product describes the additional output that results from adding one more unit of input. It can be calculated by dividing the change in the total product by the change in the variable input. For example, in order to increase the t-shirt productivity by 1000 units, the company may hire two new employees to the production line. In which case, the total change in product is 1000 units. Although, hiring two more employees increases productivity, now the law of diminishing marginal product applies. Diminishing marginal product primarily indicates that increasing one input while retaining other inputs at the same level will initially increase output; however, further increase in the output level will eventually diminish. For example, hiring an extra two employees to increase productivity, will eventually have a limited effect or diminish the average income. Production function is a graph utilized to demonstrate the relationship between physical inputs and outputs, define marginal product, and distinguish allocative
Therefore, to achieve this objective, managers have to make choices in decision-making, which is the process of selecting a course of action from two or more alternatives (Weihrich & Koontz; 1994, 199). A sound decision making requires extensive knowledge of economic theory and the tools of economic analysis, that are directly related in the process of decision-making. Since managerial economics is concerned with such economic theories and tools of analysis, it is very relevant to the managerial decision-making process.