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Main Idea Concept

Decent Essays

In chapter one, one main idea concept is firms. Firms can be small or large in scale and simply attempt to make maximize profits or make as much money as possible. Firms take inputs and combines them to add value to what they produce. Firms choose what to produce, how to produce it, where to produce it, the amount of what they produce, and the price to sell their product. A real world example of a firm can be as simple as selling cheap umbrellas on a rainy day. Because it is raining, people are more likely to buy an umbrella, regardless of the quality or price. One detail about a firms that stood out to me was the sentence about the chef who spent $30 on groceries and made an $80 meal. Firms want to spend the least amount of money as possible …show more content…

When taxes remove money from people, our purchasing power is reduced. Whatever the government spends to create jobs comes out of the paychecks of people, which means we are less likely to spend money on ourselves. A real life example of how taxation affects the government could be: the government tries to create jobs by using money from taxes to build planes or equipment, but since people know that their money goes into the planes or equipment, they are drawn away from going on vacation or buying other thing for example. I had not thought about it in the past, but it makes sense that tax cuts raise the total revenue for the government because tax cuts make people more likely to purchasing more things than we would with higher tax rates. …show more content…

Productivity is the amount of resources a business uses, such as labor and capital, to create its end result or purpose of operation. It measures output per unit of input. A real life example could be, an assembly line. When another person is added to an assembly line, more outputs are expected. Therefore, the assembly line is more productive. I think that productivity is crucial to having a successful business. A business should do whatever they can to maximize productivity because the more productive the business is, the larger profits will be for the business, which creates a profitable and very successful business.

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