Economic profits-economic losses-opportunity cost


Problem: After natural disasters, such as hurricanes, some commentators point to the "bright-side". It is, for example, often pointed out that natural disasters cause GDP for a region to spike upward during the post-disaster cleanup. As someone with an understanding of opportunity costs, if you were asked, what would be your economic analysis of the effects of the natural disaster? Using your knowledge of GDP, explain why GDP might increase during the cleanup. Using your understanding of economic profits, economic losses and opportunity cost, does this mean that the area affected by the natural disaster has experienced economic growth? What are the seen effects? What are the unseen effects?

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Microeconomics: Economic profits-economic losses-opportunity cost
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