Economics: Profits, Costs and Business Decisions
Dr. Warren Matthews
August 18th, 2014
Week six focuses on the use of economic concepts in making business decisions and how businesses should use the integration of economic concepts and strategic planning with many indications on the influence of growth on the economy. Economic growth is the increase in the nation’s productive ability and is measured by viewing or studying the Gross National Product (GNP) in the present year with the GNP in the previous year. Economic growth is influenced by the increase in the capital, technology growth, and improvement in the quality and level of literacy.
Apply Economic Concepts in Making Business Decisions
Economic concepts assist managers and economists in studying the economic decision making practice by taking into consideration variables within the current global economy. Business managers will need to consider the stages in the economic business cycle and how their company will be affected by their decisions in times of economic recessions and expansion. They need to consider the credit markets, and whether good borrowing decisions are being made, consider the international community to see if they should expand their market and resources. The world today is a more global community, and business managers are faced with larger more difficult decision to make on local, national, and international, as well as several macroeconomic factors and indicators. “Economic models help managers and economists analyze the economic decision-making process. Each model relies on a number of assumptions, or basic factors that are present in all decision situations. Almost everyone in society engages in economic decision making at some point, from the billionaire investing in real estate to the small business owner signing a contract with a supplier, to the teenager buying a video game or applying for a job,...