Describe the opportunity cost

Assignment Help Macroeconomics
Reference no: EM1369128

Back home on the range, a funny thing is happening to the beef cattle and buffalo businesses.
A. The news for cattle ranchers is not good.
· The national cattle herd has been in decline for the past twenty years.
· Per capita consumption of beef is down 20 percent in the same period.
· Producers' costs go up while beef prices go down.
· Kids that grew up on cattle ranches are leaving them in droves.
B. The buffalo business, on the other hand, is chipping along.
· Chi-chi gourmands and the fat-avoiders are driving demand skyward and along with it, prices.
· While a healthy cow and her calf sell for $600-800, a pregnant buffalo heifer sells for $3000-5000.
· Some 20,000 buffalo are slaughtered annually. About 135,000 cattle are butchered every day.
There are problems with the buffalo producers though.
They produce fewer pounds of choice meat per carcass. More than a third of the animal is ground up into buffalo burger, meat too lean to make good patties. Hence, there is a huge surplus of ground buffalo. In May 1999, the Department of Agriculture announced it would buy 25 percent of the industry's ground-meat production and give it to federal nutrition programs. They will pay $3.45 per pound, more than twice as much as it pays for beef.

Sources: John A. Baden, "Taxpayers Get Buffaloed," The Wall Street Journal, June 24, 1999, p. A22, and Mindy Sink, "Judge Puts Hold on Grazing," New York Times," June 1, 2002, p. 11.

IN 150-200 WORDS, ANSWER THE QUESTIONS BELOW (the total word count for the 5 questions)

1 Name an example of the invisible hand at work from the case.
2. Who would be better able to analyze this market, a microeconomist or a macroeconomist?
3. How would you describe the opportunity cost for cattle ranchers?
4. Is this an example of positive or normative economics?
5. Name a social, political, and economic force from the case.

 

Reference no: EM1369128

Questions Cloud

What rate of interest would she need to obtain her goal : what rate of interest would she need to obtain her goal. Are cash payments that companies make to shareholders. Are cash payments that companies make to shareholders.
What factors influence the choice of evaluation design : Employee development - What factors influence the choice of evaluation design?
Write procedure to scan string for first occurrence : Write procedure called Str_nextword to scan string for first occurrence of a certain delimiter character and replaces the delimiter with a null byte.
Discuss equity based ceo compensation : Discuss Equity Based CEO Compensation in current corporate governance environment
Describe the opportunity cost : They produce fewer pounds of choice meat per carcass. More than a third of the animal is ground up into buffalo burger, meat too lean to make good patties.
How much would you have to invest today annually : How much would you have to invest today at 8% compounded annually to have $25,000 available for purchase of a car four years from now.
Explain applications of pervasive computing : Which of the applications of pervasive computing do you believe are probable to gain greatest market acceptance over next few years? Why?
Compute the coefficient of kinetic friction : How many kilograms of water at 100 degrees Celsius can be converted to steam by the addition of 1.13X10^7 joules of thermal energy.
Fall out for bp : what BP should do from a PR stand point to bring their company back from the disaster in the gulf.

Reviews

Write a Review

Macroeconomics Questions & Answers

  Inflation targeting be a good policy

Why might it be difficult for the Fed to formally adopt inflation targeting?  Would inflation targeting be a good policy for the Fed in the present economic environment

  In using the taylor rule

In using the Taylor Rule as a guideline for monetary policy, what are the pros and cons of using forecasted values of inflation and output rather than observed values of these variables?

  Describe the present economic crisis situation in europe

Describe the present economic crisis situation in Europe.  Why has it been so difficult for the Europeans to find a solution to this problem?   Comment on what implications the crisis may have for the rest of the world if Europeans are not able to ag..

  Long-term federal government budget problems

Question:. Explain why there are long-term Federal government budget problems. Explain why the base-line forecast of the CBO is misleading.

  Derive and compare demand curve

Question based on Derive and compare demand curve,  Derive Ambrose's demand function for peanuts. How does it compare with Johnny's demand curve for peanuts?

  Problem based on utility function

Problem based on  Utility Function - Problem,  Answer and explain the following using a diagram which is completely labeled.

  Laffer curve : tax rate and tax revenue

Question based on Laffer Curve : Tax Rate and Tax Revenue,  Do raising tax rates necessarily raise tax revenue? What factors affect how tax revenue changes when tax rates change?

  Problem - income elasticity of demand

Problem - Income Elasticity of Demand,  Interpret the following Income Elasticities of Demand (YED) values for the following and state if the good is normal or inferior; YED= +0.5 and YED= -2.5

  Positive balance of payment

Question Positive Balance of Payment: "Things will look good for the US if we could just get to where we are consistently running a positive Balance of Payments."

  Effect of recession on the investment curve

Comment on the effect of a recession on the investment curve (only) and on the level of savings, investment, and the equilibrium real interest rate in the financial crisis that hits United States first starting in fall 2007.

  Affect of falling domestic investment on trade surplus and

How will a fall in domestic investment affect the trade surplus and net capital outflows in the domestic economy, the trade deficit and capital inflows in the rest of the world.

  Crises in the banking sector and bank run

Banking crises crisis decreases depositors' confidence in the banking system. What would be the effect of a rumor about a banking crisis on checkable deposits in such a country?

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd