Microeconomic Economic Essay Example | Topics and Well Written Essays - 750 words

Microeconomic Economic - Essay Example Prioritizing needs help in determining which needs can be satisfied first within the limited budget by postponing the less important ones. At a national level, the budgeting activities help in putting the government’s revenues into adequate spending areas. These are then broken down into provincial and state budgets making the allocation more precise and directed, increasing the chances of more effective use. The phenomenon of demand and supply and their effect on price determine the feasibility of each transaction in one’s personal life. By understanding the basic laws of demand and supply, I understand that the goods in demand are likely to be high priced when in season and vice versa. This helps me make smarter decisions in the day to day life. For example appliances like air conditioners are likely to be on discounted deals in winters, making it feasible for me to purchase one in winters instead of in summers. Similarly, shopping for jackets in summers helps me save a bundle on shopping for the same apparel in season. When the price affects the demand level, this is known as elastic demand. Similarly the goods whose demand is not affected by slight change in price are called inelastic. In my daily life i come across many goods that I can do without and pursue cheaper alternatives. However, being loyal to a couple of brands, I give price moderate weightage in the whole buying transaction. On the other hand, the evident inflation for necessities reflects the masses helplessness and constant demand no matter how much the prices fluctuate. Opportunity cost refers to the cost of letting one alternative go for the opting of the other. This implies prioritization and weighing the loss against the gain of each alternative. For example, the choice of working professionally instead of studying further or comparing the pros

Factors To Consider In Setting Up A Business Essay

Factors To Consider In Setting Up A Business - Essay Example In addition, Lawrence (2013) a lawyer from a foundation that gives legal advice, suggested that when one is considering a structure for his business, promoter should consider who will own the business and what the activities will be. His choice of business structure will also depend on the type of business proposed, financial needs, and number of owners. In a separate standpoint, MacFarland, (1974, pp 60-61) said businesses are always profit seeking ventures, and as such considerations should also be given to customers perceptions. He said that a lot of businesses fail because of lack of capital, business knowledge, and inefficiency in management. Above views have been supported in the work of Dorman (2011). However, she adds business planning as an important element in business decisions. A business plan is more of a statement of goals and action plan needed to achieve them. Other organizations stated economic factors as underlying principle for choices. The Forestry Dept of FAO (20 05) cited that external, internal and individual factors determine the structure of an organization. External factors are concerns in the environment which are not under the control of owners. These are economic, socio-economic and administrative factors that could affect structure. Internal factors are purpose and organizational instruments while individual choices refer to costs and benefits. Options people have when making decisions to organize Answers to above factors will solidify the type of business structure to be organized on whether it will be a sole proprietorship, general partnership, limited liability company, or a corporation since every structure has advantages and disadvantages. When one chooses an option he thinks is needed for the business, proponent should prepare himself of potential risks and liabilities, the investment needs, costs of maintaining the business structure and framework of income tax. Evaluating these decisions when a new business is starting up Be fore anything else, the proponent must have a personal assessment of his strength and weaknesses and must have a definite goal to success. Stephenson, (n.d.) of the Entrepreneur Magazine, stated that for someone to succeed in business, he must enjoy what he is doing because his satisfaction will be manifested in the success of the business. The owner must take the business seriously and must also believe in the products or services he is selling. The owner must be able to make plans, direct, and above all manage his money wisely. When the proponent is starting with a little budget, the decision to start with sole proprietorship or a general partnership seem logical because he will find it easy to set up, since it only needs one person to organize. He does not need to report to anybody as he is the boss. Sole proprietorship is simplified as it is not required to fill up many government documentations, follow specific rule, aside from having lower taxes. Mconnon (n.d.) said many small businesses started this way then later on changed structure of ownership as it grows. However, sole proprietorship is not free from headaches, as succession is not clear; there is a risk of losing business in case of death and total disability. Sole proprietorship finds it difficult to attract investors, thus it has limited financial resources. Owner has total personal liability on its debts and obligations; while profits are taxed as personal income. General partnership In order to augment owners’ capital, he/she may invite a partner into the business. This way, a general partnership is formed wherein both agree to share in capital and management of business. In general partnersh