https://padlet.com/comicnose/cg0508 Economists in the making en-us 2021-02-09 02:36:22 UTC 2021-02-24 15:39:58 UTC hello@padlet.com guo_ziming https://padlet.com/comicnose/cg0508/wish/1213979979 As real household income falls, consumers' spending ability becomes limited. This results a decrease in sales and decrease in profit. Thus, firms can choose to cut down salary/fire workers in order to minimize money lost. This lead to a trade off where the opportunity cost is the employees might change job/loss of loyalty/ talent and values the fired workers could have brought to the company is lost. ]]> 2021-02-18 06:33:26 UTC https://padlet.com/comicnose/cg0508/wish/1213979979 https://padlet.com/comicnose/cg0508/wish/1213982929
Scarcity necessitates firms to make a choice in controlling the price of their goods and services. In the face of falling real household incomes, if they choose to lower prices, Firms incur an opportunity cost which is the forgone benefits of choosing to maintain prices such as the increased profit per unit sold.]]> 2021-02-18 06:34:38 UTC https://padlet.com/comicnose/cg0508/wish/1213982929 https://padlet.com/comicnose/cg0508/wish/1213986153 Firms will see less profits due to consumers spending less and increase in sales taxes. For example, extract 1 states that "the annual growth rate in average profits in the foot retail sector has fallen by a third to 2.6%. This is due to the fact that consumers have reduced real household income and hence have limited spending ability, and in consequence, buy lesser products from firms which decreases total revenues. In addition, rising sale taxes in firms causes the cost of production in terms of capital increases, which increases price of cost. Overall, the firms will see less profits due to increased cost of production and decreased sale numbers, which might cause firms to lay off a few employees due to insufficient money to provide for salaries, which incurs an opportunity cost of the benefits and value that the fired employees could have brought to the firm

]]> 2021-02-18 06:36:06 UTC https://padlet.com/comicnose/cg0508/wish/1213986153 lin_boruei https://padlet.com/comicnose/cg0508/wish/1213987844 Due to the decline in grocery sales, the annual growth rate in average profits in the food retail sector has fallen by a third to 2.6%. The fall in profits means the firms are limited in the ways they can improve business, incurring an opportunity cost. The opportunity cost is the value of the next best option forgone such as the choice to invest in additional capital to increase production in order to increase profit.]]> 2021-02-18 06:36:52 UTC https://padlet.com/comicnose/cg0508/wish/1213987844 https://padlet.com/comicnose/cg0508/wish/1213988218 The government has to direct more funds towards aiding citizens by giving them subsidies, allowing citizens to survive easier. This incurs an opportunity cost as the funds could've been used for the next best alternative such the education sector. As such, schools now have less funds for supplies and are no longer as efficient as before but in return, citizens have more purchasing power to purchase necessities ]]> 2021-02-18 06:37:02 UTC https://padlet.com/comicnose/cg0508/wish/1213988218 https://padlet.com/comicnose/cg0508/wish/1213988373 Due to the fall in real household income, it has resulted in consumers losing significant purchasing power, causing most of them to have lesser money to spend on consumer goods. This then causes there to be scarcity, causing most people to have to make choices as lesser purchasing power means they are not able to purchase all the things that they want. Instead, they will have to choose necessities instead of their usual purchases, which is the trade-off involved. The opportunity cost is the next best alternative forgone, such as purchasing cheaper toilet paper instead of buying the expensive toilet paper they used to buy.]]> 2021-02-18 06:37:08 UTC https://padlet.com/comicnose/cg0508/wish/1213988373 sheryllynn_lim https://padlet.com/comicnose/cg0508/wish/1213988632 Due to the fall in real household incomes, this leads to people having to make more choices on where to spend their money. This would lead to more trade-offs whenever they make a choice. When they choose to spend more on groceries, this would lead to them having to forgo the next best alternative such as a better brand of toilet paper in which the opportunity cost would be their comfort level they could have felt with a better brand of toilet paper.]]> 2021-02-18 06:37:15 UTC https://padlet.com/comicnose/cg0508/wish/1213988632 https://padlet.com/comicnose/cg0508/wish/1213988876 The government has to come up with various subsidies to ensure that citizens are able to adapt to the increased cost of lifestyle, such as gst vouchers. The opportunity cost is the money that is used to carry out these subsidies, which forgoes the money that could be spent on other sectors such as healthcare,education etc, to ensure social welfare of the people.]]> 2021-02-18 06:37:22 UTC https://padlet.com/comicnose/cg0508/wish/1213988876 https://padlet.com/comicnose/cg0508/wish/1213988939 The rising inflation and limited wage growth bring about a scarcity of money among the consumers, where they have limited money to satisfy their unlimited wants. This makes the consumers make a choice, due to decreased spending power or being more cautious, on what to spend their money on, incurring the opportunity cost of the value of the next best alternative forgone, which for example be the satisfaction gained from a complete meal. This can be seen in extract 1, where "average profits in the food retail sector has fallen by a third to 2.6%." This incurs the opportunity cost, of the revenue from the unsold products, on the firms. Furthermore, an increase in sales tax causes an increase in the cost of production of the goods, increasing the marginal cost of producing the goods, making it irrational to produce more. Overall, firms will have a smaller consumer market and an increase in cost of production and thus a loss of profit. Due to the loss of profit, companies will also have to fire employees to make up for the revenue lost. This choice incurs the opportunity cost of the potential economic output of those employees if they had stayed with the firm. Therefore, due to the fall in real household income, firms face a loss in profits and a loss in potential economic output from fired employees.]]> 2021-02-18 06:37:24 UTC https://padlet.com/comicnose/cg0508/wish/1213988939 https://padlet.com/comicnose/cg0508/wish/1213989203 The choice to raise prices caused a decrease in quantity demanded by consumers due to their limited purchasing power. As such, even with the increased price, the overall revenue would decrease. Along with the sales tax, the costs increase so the overall profit decreases. The opportunity cost is the value of the money they could have earned from the normal situation (without a decrease in real income). I tried .-.]]> 2021-02-18 06:37:32 UTC https://padlet.com/comicnose/cg0508/wish/1213989203 https://padlet.com/comicnose/cg0508/wish/1213989253 the opportunity cost is the value of the next best alternative forgone. The fall in real household incomes triggers consumers to spend less money on products made by the firms. this causes the firms to have a higher marginal cost compared to their marginal revenue. the opportunity cost incurred is their ability to maximise their profits by having an equal marginal revenue to marginal cost

When demand falls, Marginal revenue falls. Profits overall will be lower.
next best alternative: maintain price
value: higher revenue/profit

Firms may consider to lower their price 

Edited: Scarcity leads to the necessity of choice. choice leads to opportunity cost.  When household income falls, firms will lose money if they keep prices the same. If firms choose to lower prices, they lose out the opportunity cost  of the benefits of maintaining prices and increasing profits ]]> 2021-02-18 06:37:33 UTC https://padlet.com/comicnose/cg0508/wish/1213989253 shannon_ang_li_en https://padlet.com/comicnose/cg0508/wish/1213989921 Due to scarcity, the government has a limited budget and chooses to provide subsidies to lessen the burden on breadwinners. This incurs the opportunity cost of investing into technology RnD, the next best alternative. Investing into RnD would earn profits for the country in the future, furthering the economic development of the country. However, choosing to provide subsidies would increase the purchasing power of the citizens, providing them the capacity to buy more necessities.]]> 2021-02-18 06:37:52 UTC https://padlet.com/comicnose/cg0508/wish/1213989921 low_rui_wen_erin https://padlet.com/comicnose/cg0508/wish/1213990154 Due to a fall in real household income, this would lead to families having  a lesser amount of money to spend on consumer goods. Due to scarcity and having a more limited amount of money, families would have to choose between items that they previously would have purchased. There is a decline in grocery sales and this reflects the fact that consumers have chosen to purchase other household items over grocery items. The opportunity cost is the value of the groceries that the family is able to enjoy, when the choice of buying household items such as toilet paper is made. ]]> 2021-02-18 06:37:59 UTC https://padlet.com/comicnose/cg0508/wish/1213990154 https://padlet.com/comicnose/cg0508/wish/1213990346 due to scarcity, in terms of the government having limited resources but the people having unlimited wants, an opportunity cost is incurred. this opportunity cost would be the government giving up on the chance of investing its resources in the education sector to produce a more skilled labour force.]]> 2021-02-18 06:38:05 UTC https://padlet.com/comicnose/cg0508/wish/1213990346 https://padlet.com/comicnose/cg0508/wish/1213991064 The fall in real household incomes have resulted in the real  value of the consumer’s money dropping, hence they are unable to buy the same amount of items as before and have to choose what they want to buy. This means that they are giving up buying the next best item that they were able to buy before to purchase what they need.]]> 2021-02-18 06:38:26 UTC https://padlet.com/comicnose/cg0508/wish/1213991064 https://padlet.com/comicnose/cg0508/wish/1213991187 Consumers have to limit their current consumption. People have less purchasing power than before, and have to restrict the goods and services they could once freely consume. For example, the grocery sales declined, as "a lot of people can't afford to spend so much, while those that can are being more cautious". As such, the opportunity cost is using the money on other wants, such as watching a movie or purchasing more goods, of which could bring about satisfaction to the consumers.]]> 2021-02-18 06:38:29 UTC https://padlet.com/comicnose/cg0508/wish/1213991187 https://padlet.com/comicnose/cg0508/wish/1213994514 Due to the fall in real household incomes, people may have had to be more selective about how they spend their money. They may choose to forego certain options in exchange for others which they deem more important. The decline in grocery sales is possible evidence of this case where people chose to spend a portion of the money that would have been spent on food for other uses such as accommodation. The opportunity cost is the value of the food they could have bought with the money spent for other uses]]> 2021-02-18 06:40:00 UTC https://padlet.com/comicnose/cg0508/wish/1213994514 https://padlet.com/comicnose/cg0508/wish/1213994761 Because of the fact citizens have less spending power, the government will have to worry about getting them to spend more on goods and services or else the economy will slow with firms closing down. So they give citizens cash for spending on luxuries and staycations, using funds to subsidise these. Unfortunately this leads to opp cost of longer lifespan of citizens as funds could be spent towards healthcare.]]> 2021-02-18 06:40:06 UTC https://padlet.com/comicnose/cg0508/wish/1213994761 abdul_rahim_saajid_rehman https://padlet.com/comicnose/cg0508/wish/1213996765 A 0.8% fall in real household incomes causes consumers to spend lesser money on the goods produced by the firms as seen from the 2.6% fall in average profits in the food retail sector. Hence, the marginal cost of the firms is higher than their marginal revenue and the oppurtunity cost is that the firms are not able to maximise their profits as the marginal cost is not equal to the marginal revenue.]]> 2021-02-18 06:40:58 UTC https://padlet.com/comicnose/cg0508/wish/1213996765 ranee_ng_yin_yee https://padlet.com/comicnose/cg0508/wish/1214000811 when real household incomes fall, consumers have less purchasing power. thus, consumers must make choices between commodities to buy. thus, an opportunity cost of the satisfaction from purchasing the next best commodity is incurred on consumers.]]> 2021-02-18 06:42:47 UTC https://padlet.com/comicnose/cg0508/wish/1214000811 https://padlet.com/comicnose/cg0508/wish/1222922221 Due to scarcity, and unlimited wants to spend limited resources on sectors in order to maximise society's welfare, this incurs an opportunity cost for the government as they have to make a choice on what to spend their resources on. Hence, the opportunity cost incurred by spending more resources in helping our economy is the development of country for example in the education sector which may lead to to lesser funds there leading to a less efficient education system which may affect the workforce in the future. ]]> 2021-02-21 09:24:20 UTC https://padlet.com/comicnose/cg0508/wish/1222922221 han_qize https://padlet.com/comicnose/cg0508/wish/1224926827 The scenario of scarcity is demonstrated in which the government has unlimited wants to maximise their citizens welfare but limited funds to do so. Hence, choices have to be made on which sectors and services to fund. In this case, if the government chooses to spend on the housing sector and provide housing subsidies for the citizens, the opportunity cost involved would be the other sectors which they could have used their funds on, such as education and healthcare. This results in citizens being able to buy houses without spending as much money whereas other sectors would not be able to operate as efficiently. ]]> 2021-02-22 06:03:43 UTC https://padlet.com/comicnose/cg0508/wish/1224926827