Tuesday, January 7, 2020

Demand, Utility and Marginality - 1611 Words

Trident University Alexander M Wayt Demand: Utility and marginality ECO201 - Microeconomics Dr. Radu Munteanu 15 June 13 Introduction When running a business, calculating margins is an essential component. Margins not only can help us figure out what our total revenue will be, they also help us decide if we need to expand as a business, stay where we are, or try to downsize. Of course other factors can be put into this as well; did prices of the goods and services we provide go up? Does this mean we should hire more people? When is a good time to hire more people? These are all things I’ve learned from this module’s reading material. Demand for Labor Increased From a company’s perspective, there are factors that†¦show more content†¦Because of this change in demand, a company will need more people to be involved in catching, breeding, and slaughtering the turkeys in order to satisfy the increased demand. The demand curve for labor will shift to the right. As for the marginal product, because the price will go up and the demand will go up, marginal product revenue should increase. This is assuming that there are enough capital goods to go around. Capital goods are the tools, manuals, and objects that the employees use to accomplish their job. Once the amounts of space for resources get scarce, the marginal product revenue will start to diminish. Total production should increase because of the increased amount of employees. Lastly, let’s take a look at wages when it comes to an increase in market price for a particular product. When a firm owner notices that the market price for their product (s) has increased, wages should also increase. This is because wages are determined by supply and demand. If the market price of a particular good or service increases, it is likely that the wages from the labor involved in producing those goods or services will also increase. Numerical Problems Something to look at while considering hiring more employees is the difference it will make. One of the keys to telling us this is called marginal product. More employees should mean more work being done,Show MoreRelatedExamples of Macro and Micro Economics840 Words   |  4 Pageshighlight its importance in everyday life, some of them are: a) The concept of utility is a base concept of microeconomics. The way we consume items, products or eatables in our daily live is all related to utility. For instance when we consume junk food it gives utility to us, when we listen to music on our iPods it provides utility to us or even when we read from a book we are getting utility out of that book. Utility basically satisfies our wants. In the examples above our want for hunger, entertainmentRead MoreInfluence of Culture on Parenting Practices and Child Development1141 Words   |  5 Pagesis extremely hot, such as in the summer months, children demonstrate more aggressive behaviors (Anderson, 1989). â€Å"Sweltering temperatures put physical and psychological demands on the body, which increases irritability and aggression† (Archer, 2012). A home environment without heat, on cold nights, because of the high cost of utility bills affects a childs restful sleep and influences the ability to stay awake in school. Furthermore, a crowded home environment, such as a large family in a smallRead MoreAccenture : Strategic Decision Making1648 Words   |  7 Pagesanalytics, senior management commitment and large scale ambition are as follows: Architecting for resiliency(distinctive capability): Executing process on a resilient digital platform that’s secure, available on demand and easy to set up and use. 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