Unit One, Post #1

                Ford Motor Company and all other businesses face the economic challenge of scarcity. Scarcity occurs because consumers and businesses have unlimited wants and needs, but limited resources. Ford uses the Four Factors of Production (land, labor, entrepreneurship, and capital) to operate their business efficiently. Without these resources, the company would not be able to produce or make a profit. These resources are used to manufacture their cars, employ workers, sell and advertise their products, and in countless other ways. However, Ford may not have enough money to finance all of these expenses. Ford must make decisions on how to make intelligent choices under scarcity to maximize their profit. CEO’s and other decision makers must use Marginal Analysis in order to find the most beneficial balance between input and output, or costs and expenses. They must find a point where the marginal cost is less than or equal to the marginal benefit in order to be a successful company. To decide how many cars to produce, they must determine the amount of cars that are wanted and/or needed by their market. They must take into account the price it costs them for each car to be manufactured, the profit that comes from each car sale, and other factors. The marginal cost of producing one thousand cars to two thousand cars, or any unit of cars to the next additional unit, can be compared to determine production. Another factor in Ford’s economic decisions is trade off. Trade off is sacrificing one economic goal for another, and is an obstacle that every business and individual faces. Ford’s trade off could include producing more capital or consumer goods, hiring or firing workers, continuing or discontinuing production of a specific model of car, and so on.

Apple uses incentives to promote their product, the iPhone. The iPhone 6 was released a few days ago, so many consumers will most likely want the latest and greatest Apple product. Apple along with phone carriers such as Verizon and Sprint give incentives to buy Apple’s older products so that the company doesn't lose money by manufacturing excess phones that no one will buy. For example, and iPhone 4s is free with a two year Verizon contract, while the iPhone 6 is $200 with a two year Verizon contract, and even more expensive without a contract. A customer on a budget will have the incentive to purchase the iPhone 4s because it is less expensive. On the other hand, a customer who is less concerned with cost may have the incentive to buy the iPhone 6 because it is faster and has better technology. Another way that incentives are used in terms of the iPhone is the use of apps with in-app purchases. Apple gets you hooked on a fun and entertaining app on your phone, and offers you extra lives in your game, commercial free radio, or a number of other extra features for a seemingly small price. The cost of the consumer gaining these features is little to none for Apple, but you have the incentive to spend the extra two or three dollars in the app store, which adds up in terms of profit for the company. Even certain apps themselves charge money up front in the app store. Apple makes the most helpful apps or the ones with the features that you want the most expensive, and they make basic versions so you can download them for free and see all of the features you are missing and have incentive to buy the premium version of the app. Other extra costs to your initial purchase of an iPhone include cases, jewels for the phone’s exterior, headphones, and charging chords. The iPhone uses incentives to get you to purchase the device itself, and then pay for extra features.