PART A
1) On pages 42-43 of ‘The Fatal Equilibrium’ Henry Spearman’s daughter, Patricia, makes an error when discussing demand. She discusses what would happen to her ‘quantity demanded’ if there was a gorilla in her waiting room, rather than ‘demand’. As we read we can see that Henry’s exasperated reaction is to cringe slightly with laughter, although he wants to tell his daughter she has made an error, he decides against it. When talking about quantity demanded - the amount of a product people are willing to buy at a certain price – Patricia really was implying demand; the relationship between price and quantity demanded.
2) Patricia expresses on page 41 that she believes she would have more business if she were to increase her rates, due to some people in Philadelphia choosing their vets depending on the high rates. Henry’s concern was that his daughter had too much work and that through the …show more content…
When Patricia mentions that the price for the paring knife is ‘steep’ and asks her father why he doesn’t look elsewhere, he replies ‘I have no doubt at all that if I spent the rest of the day shopping for paring knives, I’d probably find a much lower price than this one. But you’ve got to consider the value of time’. In economics, time can be one of the greatest costs. If time is limited, you need to ensure that it is used wisely and efficiently, which requires good time management skills. When Patricia opposes to this and questions why he would spend more than one day shopping for a car, Henry explains that shopping around for a car would result in saving a significant amount of money, whereas sacrificing time to shop around for a paring knife would be time deficiently spent as the final price would only save him a matter of dollars. This is in regards to opportunity cost, which is the cost of an alternative that must be forgone in order to pursue a certain
1) On pages 42-43 of ‘The Fatal Equilibrium’ Henry Spearman’s daughter, Patricia, makes an error when discussing demand. She discusses what would happen to her ‘quantity demanded’ if there was a gorilla in her waiting room, rather than ‘demand’. As we read we can see that Henry’s exasperated reaction is to cringe slightly with laughter, although he wants to tell his daughter she has made an error, he decides against it. When talking about quantity demanded - the amount of a product people are willing to buy at a certain price – Patricia really was implying demand; the relationship between price and quantity demanded.
2) Patricia expresses on page 41 that she believes she would have more business if she were to increase her rates, due to some people in Philadelphia choosing their vets depending on the high rates. Henry’s concern was that his daughter had too much work and that through the …show more content…
When Patricia mentions that the price for the paring knife is ‘steep’ and asks her father why he doesn’t look elsewhere, he replies ‘I have no doubt at all that if I spent the rest of the day shopping for paring knives, I’d probably find a much lower price than this one. But you’ve got to consider the value of time’. In economics, time can be one of the greatest costs. If time is limited, you need to ensure that it is used wisely and efficiently, which requires good time management skills. When Patricia opposes to this and questions why he would spend more than one day shopping for a car, Henry explains that shopping around for a car would result in saving a significant amount of money, whereas sacrificing time to shop around for a paring knife would be time deficiently spent as the final price would only save him a matter of dollars. This is in regards to opportunity cost, which is the cost of an alternative that must be forgone in order to pursue a certain