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In economics a trade-off is expressed in terms of the opportunity cost of a particular choice, which is the loss of the most preferred alternative given up. [2] A tradeoff, then, involves a sacrifice that must be made to obtain a certain product, service, or experience, rather than others that could be made or obtained using the same required resources.
In macroeconomics, the guns versus butter model is an example of a simple production–possibility frontier. It demonstrates the relationship between a nation's investment in defense and civilian goods. The "guns or butter" model is used generally as a simplification of national spending as a part of GDP. This may be seen as an analogy for ...
The model was first presented by Oliver Williamson in his 1968 paper "Economies as an Antitrust Defense: The welfare tradeoffs" in the American Economic Review. [2] Williamson argued that ignoring efficiencies that may result from proposed mergers in antitrust law "fail[ed] to meet the basic test of economic rationality". [3]
Some examples of the types of problems that the tools provided by managerial economics can answer are: The price and quantity of a good or service that a business should produce. Whether to invest in training current staff or to look into the market.
The term "hoarding" may include the practice of obtaining and holding resources to create artificial scarcity, thus reducing the supply, thereby increasing the price, so that resource can be sold for profit. Artificial scarcity may also be used to help corner a market, by reducing competition via the creation of a barrier to entry.
In the future of post-scarcity, we will not have to worry about money. We may not need to work to earn resources, which will be abundant, so we can escape from the fear of scarcity. Instead of that, we will work to get reputation and respect. Star Trek is the most famous example of the post
The scarcity development cycle refers to the process all products and services undergo through continual use within the business cycle. When new resources are created, demand rises; this causes prices to fall. The high demand eventually leads to all the easily accessible reserves of the product being exhausted and resources become scarce.
A graphical representation of Porter's five forces. Porter's Five Forces Framework is a method of analysing the competitive environment of a business. It draws from industrial organization (IO) economics to derive five forces that determine the competitive intensity and, therefore, the attractiveness (or lack thereof) of an industry in terms of its profitability.