The document discusses several economic concepts including opportunity cost, decision making processes, different types of economies (command, market, capitalist, communist). It provides examples to illustrate opportunity cost such as choosing a higher paying job in a less desirable location. It outlines the 6 steps in decision making and applies it to choosing between getting a job or going to college after high school. It also compares the advantages and disadvantages of different types of economies like command (equal wealth but no consumer choice), market (consumer choice but potential worker exploitation), capitalist (economic freedom but wealth inequality), and communist (total equality but potential for widespread poverty).

1. Principles of Business By: David Palazzo

2. Opportunity Cost Lets say you are in a situation where you are deciding whether you want to live in New York or San Francisco. You love San Francisco because of its location and people, however, the job you are going to in New York pays slightly higher. Even though you do not love the New York area as much you still choose it because right now you need the money more than you need the nice location. Making more money is a good tradeoff to location, this is a good economic tradeoff because you are benefiting more in New York than you would have in San Francisco. Now lets say you need to decide on colleges. The same situation comes into play. You only have a certain amount of money for tuition, this would make it easy to get into one of the two colleges, however, you love the other colleges campus. You decide to go with the college that you can pay for easier because although you do not like how it looks as much it gives you the same education for a lower price. The opportunity cost is great in this because now you have money for next year also.

3. The Six Steps in The Decision Making Process In this situation you need to decide whether to get a job straight out of high school or if you are going to college. The problem would be the decision you have to make. You have two choices here, you can either get a job or go to college. The advantages of going to college would be the ability to get a better job in the future, however, getting a job right out of high school provides more money for your immediate situation. Now you must choose one of these choices. I would choose going to college. Next you must act on your choice so I go to college. Now I review my decision. I believe that I made the right choice and that getting a job right out of high school would have been a bad decision.

4. Fly to Florida or Drive? The problem is you don’t know if you want to fly or drive to Florida. Your choices are either flying or driving to Florida. By flying to Florida you are getting there quicker and but spending more money. By driving it may take longer but it would cost less money. I would choose to drive because I like long car rides and it would not cost as much as a plane ticket. Even with high gas prices. Looking back on my decision I made the right choice.

5. Command Economy In a command economy the resources are owned and controlled by the government. Some countries that are command economies include China, and Saudi Arabia. An Advantage of a Command economy is that everyone is equal in wealth. A disadvantage of a command economy is that there is no accurate way to see what consumers want.

6. Market Economy A market economy is where the resources are owned and controlled by the people of the country. The United States of America is a Market economy. An advantage of a market economy would be that consumers can buy any product they want and in any amount. A disadvantage would be the exploitation of workers.

7. Capitalism Capitalism refers to the private ownership of resources by and individual rather than the government. The U.S.A is a largely capitalist country. The Advantages of being capitalist is the it puts emphasis on economic freedom. A problem with capitalism is that the rich get richer.

8. Communism Communism is the idea that everyone will have an equal amount of money. China is a communist country. An advantage of being communist is that there is total equality A disadvantage of being communist would be that for a time everyone in the country is poor.