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Basic Microeconomic Trade-Offs Essay

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Updated: Nov 25th, 2021

Introduction

Microeconomics is considered to be the study of scarce resources (Perloff, 2007, p. 117), and it is also referred to as “the study of how individuals and firms make themselves as well off as possible in a world of scarcity and the consequences of those individual decisions on the markets and the entire economy” (Microeconomics, 2009). This means that according to the principles of microeconomics people and companies should consider resource allocation as the basic part of the decision making process. What products/services are produced, how they are produced, and who gets those products are three main trade-offs that microeconomics has for individuals and organizations to consider.

Main Body

The first of the three above mentioned trade-offs is the process of identifying what products/services are to be produced among the whole variety of products/services that a company might deal with (Cohen, 2001, p. 182). The example of the proper handling of the first microeconomics trade-off is the Atlanta, GA based transportation company World Courier Ground that focuses on the same day delivery services within Atlanta and the major part of Georgia. Specializing also in transportation dispatching and consulting, packing and warehousing, the World Courier Ground prefers same day transportation as focus on this service allows the company to save resources and satisfy the permanent demand for such services in the market within Atlanta (World Courier Ground, 2009).

As for the second microeconomics trade-off, it regulates the ways in which the product/service production can be made as cost- and effort-effective as possible (Perloff, 2007, p. 131). This point can also be exemplified by the activity of the World Courier Ground that resorts to the cost effective service provision in respect to same day delivery services. In more detail, the World Courier Ground resorts to the immediate shipment pick up procedure during which the company’s representative arrives at the specified location and picks the shipment up within the time specified on order placement. On delivery completion, the Proof of Delivery containing the addressee name, time of delivery, and delivery location is sent to the customer (World Courier Ground, 2009). Such a fast and structured procedure allows the World Courier Ground to adopt cost effective service provision to its customers.

Finally, the third basic trade-off of microeconomics considers the target customers of the product/service suggested (Cohen, 2001, p. 185). The point here is that companies often choose to focus on their target customers to facilitate the product/service provided to them and economize production, distribution, and delivery processes (Cohen, 2001, p. 185; Perloff, 2007, p. 140). If the World Courier Ground is taken as an example, this company has its actual target customers among the people and organizations that use the same delivery services. Every person or organization in need of an urgent delivery can order the service by the World Courier Ground and be served in the proper manner and within the specified time limits (World Courier Ground, 2009).

Conclusion

Thus, the examples of the Atlanta, GA based service provider titled World Courier Ground dealing with same delivery services, allow seeing how important the three basic trade-offs of microeconomics are in the business world. Knowing what products/services should be produced, how and for whom they should be produced means much in the sense of cost efficiency and business development of the modern companies.

References

World Courier Ground. (2009). Professional Urgent Same Day Delivery and Courier Service for Greater Atlanta, GA. Web.

Cohen, S. (2001). Microeconomic policy. New York City, NY: Routledge.

Microeconomics (2009). What is Microeconomics? Web.

Perloff, J. M. (2007). Microeconomics (4th ed.). New York City, NY: Pearson Addison Wesley.

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IvyPanda. 2021. "Basic Microeconomic Trade-Offs." November 25, 2021. https://ivypanda.com/essays/basic-microeconomic-trade-offs/.

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IvyPanda. (2021) 'Basic Microeconomic Trade-Offs'. 25 November.

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