Thinking like an Economist
You are one of a few co-owners of a commercial space of 50,000 sq. ft. in the building in downtown of your selected town in the State of NY (name it up front in your assignment). You have to come to a common decision like economists what to do with it now. Some of you run own private single-owned businesses and might find this space useful for your own purpose. So far, you have invested $20,000.00 in the renovation of the building. You have to motivate your decision based on the principles of economics.
Have in mind current market conditions. Use formal language and correct terminology in your discussion of relevant economic concepts, and apply relevant economic tools for problem solving in this real-life imitating simulation. As there might be differences in opinions support your proposal in the assignment with supporting data and include also one-page memo presenting the summary of your recommendation, the way of your thinking adopted, and the decision to be agreed upon. Some extra research would be helpful. You can adopt a real or a mock example if want to work with more details.
Consider and discuss in the assignment, the issues in your decision making process, such as:
- assumptions
- trade-offs, values and incentives
- rational choice
- marginal changes
- sunk costs
- opportunity cost
- factors of production
- market forces: demand and supply, market equilibrium
- possible externalities
- economic variables that can influence your choice
- business cycle
