Business Economics And Behavioral Models

Running Head: Business Economics 1
Business Economics
Student Name
3/19/2020

Running Head: Business Economics 2
Contents
Question 1.................................................................................................................. 3
Question 2.................................................................................................................. 3
Question 3.................................................................................................................. 3
Question 4.................................................................................................................. 4
Question 5.................................................................................................................. 5
Question 6.................................................................................................................. 5
Question 7.................................................................................................................. 7
Question 8.................................................................................................................. 8
Question 9.................................................................................................................. 8
Question 10................................................................................................................ 9
Question 11................................................................................................................ 9
Question 12.............................................................................................................. 10
Question 13.............................................................................................................. 10
Question 14.............................................................................................................. 11
Question 15.............................................................................................................. 11
References............................................................................................................... 13

Running Head: Business Economics 3
Question 1
Total Cost = Actual Cost + Opportunity Cost
Therefore;
8000+4000+20000
=32000
As the research expense will also mean losing the 20,000-year salary, which Ted might normally
get.
Question 2
The automaker focused on what people were doing, instead of what they were doing. In
this case an economic model would have been attempted to determine whether the anticipated
benefits from driving safer vehicles would have been significant enough to justify the higher
price for consumers. Economic models are behavioral models and not models of how and what
people think, or how the opinions of people directly influence their behaviour. In addition, they
didn't take into account other variables (Ellis, Liu, & Christofides, 2016).
Question 3
As in order to analyze the trade policy of US and Canada, this argument is incorrect as
trade in goods and services depends on the infrastructure available in the respective countries.
The US has a trade deficit of goods as seen in the diagram, and a trade surplus with Canada for
service. It means that, relative to Canada, the United States has stronger infrastructure or more
varied infrastructure and a net export of services to Canada Conversely, Canada is a net exporter
of products to the United States, and the United States, on the other hand, is a trade deficit of
products, as seen in the figures below:

Running Head: Business Economics 4
In 2018, the US trade deficit with Canada in products was $19.1 billion. Trade in services
(exports and imports) with Canada totaled a record $99.9 billion in 2018. Exports of services
stood at $64.1 billion; imports of services stood at $35.9 billion. In 2018, the US services trade
surplus with Canada stood at $28.2 billion (Gholizadeh-Roshanagh, & Zare, 2019).
In 2018, Canada became the top manufacturing market for products in the United States.
In 2018, Canada became the third most significant source of supplies of products in the United
States.
Question 4
The statement is true entirely as this line raises output of the nation and most limitations are
implemented in the field of specialization and exchange. Since it's so:
 A nation specializing in a single commodity variety that allows products cheaper in this
area raises the purchase rate of this drug. It is a specific form of product that allows them
to raise their intake as it is affordable.
 Trade from various parts of the world often leads to expanded demand, as trade barriers
between countries have decreased slightly from their history.
 It implies that it is a limited resource available in the world because a specialized
commodity is accessible anywhere, then it can be utilized carefully rather than provide
more than needed, and therefore it is necessary in goods of this sort to raise tariffs and
their value in reaching annual demand rather than suppliers and that production,
decreasing resource availability.
 If a product is manufactured or more diverted to a certain location in the country, it is
time that government introduces additional duties or quotas, such that the demand is that.