Discussion Questions

1. Explain why the consideration of opportunity costs may be very relevant to a firm. How can opportunity costs affect a business decision? Use an example to support your answer.2. Think about a good or service for which you believe there has been a shift in demand or supply. Explain the reasons behind the shift and how that has influenced the equilibrium price3. In a perfectly competitive market where there is virtually no product differentiation, what do you think are the priorities or focus of a firm? How could a firm increase profits4. Explain a situation you have observed (or read about) in which a firm made a decision considering irrelevant costs or did not consider relevant costs. What was the outcome of the decision, and what could have been done differently?5. What market structure best describes the environment within which your organization operates? What challenges and opportunities would arise from higher and lower degrees of government intervention?6. According to Coase’s theory of the firm, why do firms exist? How do firms contribute to the efficiency of the market economy in ways that networks of independent contractors do not? How are the boundaries of the firm best established?7. Identify a personal economic decision that was driven by a behavioral bias rather than by pure rational behavior. Given your understanding of behavioral economics, how would your decision differ today?8. In which cases would an organization benefit from using direct and indirect price discrimination? Does market structure influence the capacity of the firm to use price discrimination?9. Read “7 Easy Ways to Use Game Theory to Make Your Life Better,” by Duronio. Reflect on your personal life experiences. Discuss a instance in your life in which you used game theory to earn or save money. Did you realize you were implementing game theory in the situation? How did the outcome benefit you at that moment and in the future?10. Using the Topic Material “Game Theory,” discuss your perspective on the use of game theory. How do “Nash equilibrium” and the idea of one “player” impacting another “player” within an organization affect the economic decisions and growth of an organization?11. Discuss the importance of analyzing competition within an industry to better appeal to potential candidates. How can an organization use incentives to ensure it appeals to the employees it wants to hire?12. Discuss how wages are determined in labor markets. Explain how a monopsony market structure is affected by a price floor (minimum wage), and what is the effect of the monopsony of the local economy?13. Identify one environmental factor or risk that affects the decision-making opportunities within your organization. Provide a brief description of the concerns and potential solutions for addressing the concerns or risks. Are there financial requirements that must be considered when processing decisions within a company?14. How does the financial strength of an organization influence decision making and outcomes?15. Using the concept of “carry trade,” explain how a decrease in U.S. interest rates could affect the EUR/USD exchange rate. Given this change in exchange rate, how would firms and customers be affected?16. How do economists define a “bubble”? Provide an example of an asset market that you think could be the next bubble and explain why.