Assignment:
Discussion 1
Opportunity cost is the value of the second-best alternative that is passed up in place of any choice made. More specifically, "economists use the term to denote the full value of the best alternative that is given up, or forgone," (Amacher, 2019). It can be something basic in terms of the value of a candy bar when passed up in favor of the choice of a Nutra-Grain bar as a snack, to more complex choices such as the example presented in this discussion.
The opportunity cost of the decision LeBron made would be equal to the value of the education passed up in place of entering the NBA draft. Opportunity cost placed on the value of education passed up, in place of taking employment, is complex. Assuming LeBron's second best alternative to entering the NBA draft was to attend college under a scholarship, his opportunity cost would be forfeiting the free education he might have received while attending school. The value of that education is hard to determine. The actual cost of education for any of the schools that offered him a scholarship would have to be considered in both the dollar amount, to include tuition and all other expenses covered under the offered scholarships, and the value of the quality of life someone gains from their education. The specific degree plan he might have chosen to pursue while enrolled would also have to be considered. The value of a degree in computer science versus the value perusing a liberal arts major might have some differences.
I would absolutely have made the same decision LeBron made. I would also argue anyone who wouldn't isn't being rational. Any desired education aspirations one might have could easily be attained after just one year (let alone several) playing in the NBA under the initial contracts offered to LeBron. He had a winning lottery ticket and he cashed in. He can attend college any time he likes without any financial burden. Anyone would be nuts to not follow the same route if blessed with a similar talent that offered such lucrative contracts.
Amacher, R., & Pate, J. (2019). Principles of macroeconomics (2nd ed.). Economics, Economic Methods, and Economic Policy.
Discussion 2
Define the opportunity cost in your words:
1. What is the opportunity cost?
2. What was the opportunity cost for LeBron James when he determined to directly enter the NBA?
3. Would you have skipped college if your opportunity cost had been that high? Explain.
Resources:
Amacher, R., & Pate, J. (2019). Principles of macroeconomics (2nd ed.).
Discussion 3
There are four economic systems listed in our text book. Traditional, command, market, and mixed economies are each defined. A traditional economy resolves economic issues by using the answers to solutions used in the past (Amacher, 2019). These economies tend not to be sophisticated (Amacher, 2019). Command economies address economic issues through a central planning authority that makes all decisions regarding what and how to produce or serve (Amacher, 2019). A classic example of a command economy would be the former USSR. Market economies rely on incentives and self-interest behavior of the people within the society to determine production through market exchanges (Amacher, 2019). Finally, the mixed economy is a blend of any of the listed categories with most basic decisions favoring the market economy, but having some government (or command) involvement (Amacher, 2019).
The U.S. is a mixed economic system leaning mostly towards the market economy with elements of command economic systems blended in. The U.S. government factors in to the economic system in many areas through its direct and indirect involvement. One direct function the U.S. government provides is defense, which affects the economy through its massive budget. Other direct ways the government impacts the economy are utilized through redistribution of funds in the form of taxation.
Indirect government functions are numerous. Providing funding for education, infrastructure, agriculture, and medical insurance are just a few examples. There are many more every-day areas affected by the government through law and regulatory bodies that would simply be too numerous to list.
The U.S. government's economic role is critical to the overall economy. Without government involvement and influence, our economy, and society as a whole, would be in chaos. Police & fire protection, suitable roads to travel on, safe airways, regulated banking and trade, financial assistance to the elderly or disabled, and not to mention, safe food to eat and water to drink, would all be questionable if not for government economic intervention.
The appropriate level of the government's involvement in our economy can, and will be, argued far past any of our time in this life. Every aspect, of every economic platform is affected by government in some way. For the most part, those effects are positive towards our society. I feel the opinion of someone towards the level of government economic involvement is proportional to the level of affluence they might enjoy. Simply put, the rich mostly advocate for as little government involvement as possible and the poor will argue (or should be arguing) more is needed. This idea all boils down to how independent you might be and that independence mostly hinders on how wealthy you are.
Amacher, R., & Pate, J. (2019). Principles of macroeconomics (2nd ed.). Markets, Governments, and Nations: The Organization of Economic Activity.
Discussion 4
Briefly describe the types of economic systems. What is the United States' economic system and what are the characteristics of this economy?
What economic role or functions does the U.S. government conduct regularly?
Why is the U.S. government's economic role important or unimportant for the U.S. economy? Discuss whether you favor a larger or smaller government role in the economy.
Amacher, R., & Pate, J. (2019). Principles of macroeconomics (2nd ed.).