Fundamentals of Macroeconomics
When something is free, most consumers think it comes at no cost to the recipient. Examples are buy two, get one free promotions, samples from Macy’s, and buy one, get one half off promotions. In economics free means free and there is no cost to the consumer; however, by economic definitions, nothing is free (quote). Samples usually cost the producers, since they are the ones producing them. Buy one get one free, costs both the producer and consumer. The producer has to spend money producing the products and the consumer has to spend money buying one in order to get one free. Community programs and nature also come at a cost; the environment needs energy and time to grow and community programs are usually funded by the government.
The cost of goods and the decisions that are made daily contributes to the cost of everything. The fundamental component of economics is the idea of nothing is free (site). This concept is what fuels decision-making and leads to the basic understanding of economics. Consumers needs and wants help fuel the economy, though these “needs and wants” differs from person to person. For example, one person wants may be another person’s needs. In economics there are no needs, because everything has an alternative. For example, unemployment is the alternative to a job and reading is the alternative to television. (Site).
The grocery industry produces a many products, purchasing intermediate inputs from other parts of the economy and transforms it for final consumption. In the grocery industry, the employees and suppliers spend earned income in the production economy wide. The overall impact involves three components: direct, indirect, and induced effects.
The Direct effects involves activities that directly attributes to grocery manufacturing, like employees and manufacturers output. Indirect effect involves the activities of upstream suppliers, like contractors and other companies providing input. Induced...