Following are exs of typical economic decisions made by
1- Following are exs of typical economic decisions made by the managers of a firm. Determine whether each is an ex of what, how or for whom.
a- Should a company make its own spare parts or buy them from an outside vendor ?
b- Should the company continue to service the equipment that it sells or ask customers to use independent repair companies?
c- Should a company expand it's business to international markets or concentrate on the domestic market?
d-Should the company replace it's own communications network with a virtual private network that is owned or operated by another company?
e- Should the company buy or lease the fleet of trucks that it uses to transport it's products to market?
2- Because of inflation, a company must replace one of it's (fully depreciated ) machines at twice the nominal price paid for a similar machine eight years ago. Based on present accounting rules , will the company have covered the entire cost of the new machine through depreciation charges? describe by contrasting accounting and economic costs.
3- You have a choice of opening your own business or being employed by someone else in a similar type of business. What are some of the considerations in term of opportunity costs that you would have to include in arriving at your decision?