Managerial Economics Assignments

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Appendix A: ASSIGNMENT COVER SHEET | | Date Received:........................................................... | | | Programme | Master of Business Administration | Module Name | Assignment: Managerial Economics | Surname | Amweenje | First Name/S | Edward Ludwig | Student Number | MBA1120419 | Date Submitted | 21 May 2012 | Postal Address | P.O. Box 62705 | | WANAHEDA | | Namibia | | 0000 | E-MAIL myregent email address | @myregent.ac.za | | (Please note that confirmation of assignment receipt as well as return of marked assignment will be forwarded to this email address) | E-Mail (alternate email address) | lamweenje@iway.na | Contact Numbers | Cell: +264 81 215 9604 …show more content…
Choice according to (Heyne), involves the best possible combination on the PPC/PPF(a, b or e in the case of Fig 1.) that will suite the quantity of production of both products the business can make. Scarcity is simply a state where it is impossible with the limited available resources to produce higher quantities of both products, the points outside the PPC/PPF (Heyne).
The graph, Fig 1. Below, illustrates an assumption of the business which produces both cars and food. Point a on the PPF shows that if the output of the business for cars is 200, it can only produce 2 tons of food, but if the business were to increase the production of food by 1 ton (Point b) then the company have to sacrifice the production of cars by 100 of cars, and that is referred to as the opportunity cost. The opportunity cost on cars on the PPF shows that, the more the food is being produced, the more cars must be given up or sacrificed.
Point c which is inside of the PPF indicates an inefficient or low outcome of production, meaning the business is producing less than it is capable of. Cars (Qty.) 300

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