Additional Application Do Implicit Costs Affect Decision-Making in the Real World? for World

question 23

Multiple Choice

Additional Application
Do implicit costs affect decision-making in the real world? For the first time nationwide the number of golf courses closing in a year will exceed the number that is opening.This can be explained by a number of reasons.One is the cost of insuring golf courses,which has increased in many areas.Also the number of rounds played has decreased 4% in the last six years.But another explanation is the opportunity cost of owning a golf course.As property prices have increased,the land that golf courses are on is worth a great deal more as housing developments.The owners must continually decide whether the return from operating a golf course is greater than,or at least equal to,the return the owners could get if the land was developed for another use.Furthermore,one explanation for the decline in rounds being played is attributed to the time it takes to play golf.As the opportunity cost of a golfer's time increases,the fewer hours he/she is willing to spend on the golf course.Implicit costs are real and play a role in decision-making of both supply and demand.
"Blues on the Green: Why Golf is in Decline," The Economist,October 14,2006,p.70.
-Which of the following would be an implicit cost of operating a golf course?

• A)the cost of fertilizers and water
• B)the cost of groundskeepers
• C)the cost of property insurance
• D)the cost of not developing houses on the property

Comprehend the impact of diversification on portfolio risk.

Analyze the separation property and its implications for investment decisions.

Understand the definition and importance of sustainable development.

Recognize the significance of intragenerational and intergenerational equity.

---

Definitions:

Basic Function

The fundamental purpose or role that an entity or process serves in a system or organization.

Decision Groups

Are assemblies or teams formed to analyze situations, consider alternatives, and make choices collectively.

Systematic Decision

A decision-making process that follows a methodical and logical approach, often involving steps such as identifying a problem, gathering information, and evaluating alternatives.

Effective Leader

An individual who achieves desired results through inspiring confidence, fostering teamwork, and guiding others with clear vision and decisiveness.