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For My Students - Example case study solution p2 2011

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I am not sure why this is getting so many views, it is only of use for a specific group of students from 2011 doing a specific piece of work for me.

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For My Students - Example case study solution p2 2011

  1. 1. Example Case Study Solution<br />Project 2. 2011<br />
  2. 2. The Case Study<br /> Ahmed has a job and earns Dhs 20,000 per month. He has loans for his car and a personal loan to repay and also some credit card bills and well and his rent and telephone and food and other expenses to pay. The problem is that there are many things that Ahmed would like to have and he has realized that to get many of them he will need either increase his loan or use his credit card again.<br /> In particular he wants to get a tabled computer like the iPad or the Galaxy Tab by Samsung. He thinks the iPad is cool but then again a lot of people have them and he likes to be a bit different and also the Galaxy has some good features as well. He does not have the cash for either to buy either of them.<br /> <br /> Explain the above case using some of the economic theories covered in class.<br />
  3. 3. Theory One<br />Basic Economic Problem<br />
  4. 4. Basic Economic Problem<br />Unlimited Wants<br />Limited Resources<br />
  5. 5. Scarcity<br />
  6. 6. Basic Economic Problem<br />
  7. 7. Ahmed<br />Ahmed’s income in limited<br />His wants are unlimited<br />
  8. 8. Ahmed’s Solution<br />He borrows money to try and fulfill more of his needs.<br />
  9. 9. The Problem<br />This makes things worse - not better, as he now has to repay that money plus the cost of borrowing.<br />
  10. 10. Cycle of Debt<br />
  11. 11. Choices<br />Ahmed does have choices.<br />
  12. 12. Cost / Benefit<br /> He needs to evaluate the costs & benefits of each choice.<br />
  13. 13. Cost / Benefit<br />
  14. 14. The cost of what you give up<br />
  15. 15. Everything has an Opportunity Cost<br />
  16. 16. Ahmed Choices<br />1. Whether to buy any tablet computer at all?<br />2. Which tablet computer to buy?<br />
  17. 17. Free Market Economy<br /> Ahmed is free to decide how to use his limited resources.<br /> These choices are his.<br /> In a Command Economy he would not get this choice at all.<br />
  18. 18. Choice 1 can be shown in a PPF<br />
  19. 19. A model of an economy<br /> How do goods get to the shops?<br /> How do households get the money to buy them?<br />How do Firms get the Factors of Production?<br />Let’s look at an Economic Model of this…<br />
  20. 20. Where does Ahmed get his salary?<br />
  21. 21. Get the idea?<br /> There are several more theories I could cover in this case study.<br /> But I am sure that you get the idea.<br />
  22. 22. References<br />Rice Photograph; http://www.treehugger.com/hands-rice.jpg<br />Basic Problem Model; http://www.newlearner.com/courses/hts/cia4u/images/scarcity.jpg<br />Debt Image ; http://www.thedigeratilife.com/blog/debt-solutions-debt-cycle/<br />Cost / Benefit image; http://www.12manage.com/images/picture_cost_benefit_analysis.gif<br />Opportunity cost 1 http://www.intuitivewu.com/images/opportunity-cost.jpg<br />Opportunity cost 2 https://mrski-apecon-2008.wikispaces.com/file/view/comics_clip_image001.gif/41674117/comics_clip_image001.gif<br />PPF: http://i.investopedia.com/inv/dictionary/terms/ppf.gif<br />CFI image : http://www.oxfam.org.uk/education/resources/milking_it/milkingit/images/agricultural_prob/circular_flow_of_income.gif<br />

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