ECONIMIC CONCEPTS-GLOBAL CUSTOMERS Coursework Example | Topics and Well Written Essays - 750 words

ECONIMIC CONCEPTS-GLOBAL CUSTOMERS - Coursework Example This means that by resorting to produce a chicken, Michelle would forego the value of producing 4 pounds of potato. Answer 3 The opportunity cost of James of potato producing is (=40/80), i.e. ? chicken per pound of potato. Thus by producing 1 pound of potato, James would forgo the value of producing ? number of chicken per year. Answer 4 The opportunity cost of chickens production for James is (=80/40), i.e. 2 pounds of potato per chicken. This means that James would forgo the value of producing 2 pounds of potato for choosing to produce 1 chicken. Answer 5 The absolute advantage of the activities of producing potatoes and chickens by Michelle and James could be determined by comparing their production of chickens and potatoes per unit time, i.e. 1 year. This could be determined from the table given below. Â   Potatoes (pounds) Chickens (nos.) Michelle 200 50 James 80 40 It could be observed that Michelle could produce 4 pounds of potato per chicken in one year while James could pr oduce 2 pounds of potato per chicken in the same time period. For producing both potatoes and chickens, Michelle has an absolute benefit compared to James in the volume of potatoes and the number of chicken produced by them in one year. Answer 6 The comparative advantage would be attained if the opportunity cost is lower as compared to that of the others. ... This means that James have attained comparative advantage over Michelle as he has sacrificed lesser value as compared to Michelle for producing chickens. Answer 8 Assuming Michelle specializes in producing potatoes and James specializes in producing chickens, a trading rate of 2.5 pounds of potatoes in exchange of 1 unit of chicken would help to determine whether it’s better off for them. This trading rate is better than the opportunity cost of 1 chicken for 4 pounds of potato produced by Michelle. Thus Michelle would be better off in trading with his specialization. Also, the trading rate is better than 2 pounds of potato for 1 chicken produced by James. Thus James would also be better off in this situation. Answer 9 The above findings could be narrated to the business, society and the nations, at large to effect use of trade theory that explain the difference between absolute advantage and the comparative advantage. It has been observed that although James does not hold abso lute advantage in production of either potatoes or chickens, he has still been able to attain a better off position in trading of chickens. This is because James has focused on his specialized area where he holds a comparative advantage over Michelle. The same is applicable to the business, society and the nations. The business, society and the nations which lag in their production volumes per unit time as compared to others may not hold absolute advantage over others. The benefits of trade, however, do not depend on the absolute advantage but depends on the comparative advantage (Maneschi, 1998). By specializing on trade in which entities have comparative

Aqualisa Quartz Low Sales Essay Example | Topics and Well Written Essays - 1500 words - 5

Aqualisa Quartz Low Sales - Essay Example The shower industry in the UK has three channels of distribution. Trade shops, showrooms, and DIY sheds are the channels of distribution for the Aqualisa products.   Trade shops carry plumbing supplies for plumbers.   Trade shops normally only carries what will sell, or in essence what is in demand. Showrooms are supplied by distributors. This channel is for high end customers. When an individual buyer comes to a showroom, they tend to not be concerned with price. DIY sheds are supplies for do-it-yourselfers. B&Q is like Home Depot. This market is for bargain hunters and home improvers. These three channels of distribution are where Aqualisa Quartz will be marketed. The best channel of distribution for the Aqualisa Quartz is the showroom. The reason for the good showroom sales for the Aqualisa Quartz is the digital features on the showerhead. Individuals walk into the showroom and see the red light that stops blinking when the shower is the right temperature. This novelty alone sells most of the units in the showroom. Aqualisa Quartz is easier to install and more efficient than other showers, but plumbers are skeptical of using new products. This lowers the sales in the trade showrooms. Aqualisa Quartz has been marketed properly for the DIY sheds, due to the fear that it would lessen the product value. All of these factors have led to lower sales than expected for the new innovative Aqualisa Quartz. In order to raise sales, the key factors must be looked at. Since the Aqualisa Quartz is an innovative new product, Aqualisa priced the product higher as a premium item. The Quartz Standard is 850 pounds and the Quartz Pumped is 1,080 pounds.1 This makes it the highest product sold by Aqualisa. It also makes it the highest money maker for the company, but only when sold. If Aqualisa Quartz was marked down, consumers might feel they are getting a bargain and quality.