Buss. Org Essay

6272 WordsMar 21, 201526 Pages
BUSINESS ORGANIZATION Página 1 de 56 TOPIC 1.ECONOMIST’S VIEW OF BEHAVIOUR 1. INTRODUCTION The basic idea of economy is that resources are limited but people have unlimited wants. This is a conflict, so we have to choose how to allocate these scarce resources. People face trade-offs (todas las opciones de la decisión comportan costes de oportunidad). People need time to learn to make a decision, usually is called “trial & error”: they try, and it can fall, and then the individuals learn from their mistakes. Individuals will choose a decision subjected to their limited resources and the imperfect information that they have. Like Darwin said “the survival of the fittest”, the enterprises must adapt to costumers, costs, places... The main question is, is there any common pattern that helps explain how people make decisions like those? Economists typically approach these decisions with two criteria: - Marginal Analysis
 - Cost-Benefit Analysis Página 2 de 56 Thinking at the MARGIN When choices are made, people think at the margin, marginal benefits are the additional benefits obtained if we choose this option Sunk COSTS The sunk costs are the costs which are not recoverable and that can influence the decision. They are the costs that have preceded the decision, they have been inverted and you can’t recuperate it. It can be a problem if you don’t change a decision thinking that you can recuperate the sunk costs. The nature of OPPORTUNITY COSTS All choices involve trade-offs, the value of the forgone option is the opportunity cost of the selected option. There are: -Explicit Costs — Direct dollar expenditures -Implicit Costs — Reflect opportunity costs that are not direct expenditures (the 
 time, for example). 
 Página 3 de 56 2. ALTERNATIVE MODELS OF BEHAVIOUR The “economic model” is not assuming that individuals are selfish (altruism can be

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