Application of Microeconomic Principles – Peer review of each discussion should be made with 100-150 words each review
Peer 1 Discussion:
The opportunity cost means you have to leave every line to buy what you need, just like other products or businesses. When business analysts use “costs,” we are generally referring to opportunity costs (Roychaudhuri, 2018).
When assets are capitalized, you need to determine how they will be used and what options you want to eliminate. Finance professionals use the term opportunity cost to show what you have to offer to get what you need. The main guiding principle of the fund is that every decision has an opportunity cost. If you’re retiring from a finance class (by the way, not recommended), the opportunities to spend are the learning you missed. If your salary is paid on video games, you can’t spend it on animation. If you decide to marry someone, you are giving everyone a chance to get married. The opportunity cost is, therefore, all around us.
The idea behind opportunity spending is that spending something wastes a business opportunity or burns something else; To be clear, the opportunity cost is the second-best alternative estimate.
Because individuals have to choose, they have to face delivering what they want in exchange for other things they like the most.
We demonstrate the importance of residual international trade (IP) research and work explicitly with human resources and international authorities (IHRM) to address infectious issues related to COVID-19. The leaders of international organizations have taken various measures to mitigate the effects of the epidemic. While these activities are often large-scale or organizational, they are linked here and there to manage distance and re-evaluate boundaries. The Intellectual Property Research Department is a focal point for intellectual property research, remote monitoring, and testing established as a genuine part of intellectual property (Lefebvre, 2018).
Peer 2 Discussion:
Scenario: Sony is one of the leading manufacturers of various kinds of electronics and gaming consoles. Its products are known for their advanced technology, enhanced user experience, and durability. Sony releases different variants of PlayStation once every few years.
The company proposed to launch its latest PlayStation 5 console during the Thanks Giving season of 2020. Initially, it planned to manufacture 15 million consoles by the end of the 2020 fiscal year. However, according to their sources, Bloomberg stated that Sony had reduced its estimated production units by 4 million. According to CNBC, Sony’s share market value dropped by 2.41% after the news went viral.
Opportunity Costs: According to Cory Mitchell, “Opportunity cost is the value of the alternative you gave up, plus what your choice costs you.” It can be better explained by using the above scenario.
Sony decided to produce 11 million units instead of the proposed 15 million. They had to lose their sales of 4 million products plus a drop of 2.41% in their share value based on their choice. The opportunity cost in Sony’s case is enormous and has resulted in a significant loss to the company.
Trade-off: It is defined as the sacrifice we make to obtain a service or good. In Sony’s case, the trade-off the organization had to make is to lose its sales of 4 million units.
Application of opportunity cost to the trade-offs we make
In our case, as a consumer of Sony’s PlayStation 5, we have to make our trade-offs and opportunity costs. It’s a known fact that trade-offs create opportunity costs. The trade-off as a consumer we have to make is to spend our time outside the store waiting in line to purchase the PlayStation 5 as there is a shortage of units. The opportunity cost we have to face is we could not spend our valuable time with our family, plus we have to purchase the unit at a higher price.
Trade-offs we all must make during the COVID-19 pandemic
The COVID-19 pandemic has affected every individual worldwide. All industries were affected and have caused scarcity in food, health, sanitation, and labor. Every individual has to make trade-offs to survive during this pandemic. Scarcity occurs based on multiple factors such as an increase in demand, lack of resources, and lack of substitutes. As a result, we need to make few trade-offs to cope up with the scarcity. We have to sacrifice our wants and adjust to what is available in the market and spend our time in line to acquire our desired goods or services. Also, risk our health and pay more price to acquire the product or service.