Zoolinomics
The Economics of Zoo Keeping
Sorry, big guy! You didn’t make the cut!!
Discussion Question:
Did every animal make it into your zoo? Why or why not?
Scarcity necessitates choices
It was limited by the space of the zoo, it would
have taken almost twice the land to fit every animal
in the zoo.
If the issue of scarcity did not exist then we could fit
everything that we wanted in the zoo. Scarcity
again shows to be the basic economic problem.
Discussion Question:
Did you include a turkey or a cow in your zoo? Why or why not?
Benefits vs. costs
No group included cows. This is most likely because
cows are not relatively scarce, although they are
limited, and they do not have a strong demand. You
would not be willing to give up a third of an acre for
the very little benefit that you would receive. This is
called cost/benefit analysis. The opportunity cost of
three cows is 1 acre. Economics decisions are
cost/benefit decisions.
Discussion Questions:
Why didn’t you have a zoo with only monkeys?
Diminishing marginal benefit:
Monkeys are cool. People will pay to see monkeys, but just
like with any “good”, the more you have of them the less each
additional monkey is worth. I like ice cream, but the 2nd scoop
is always better than the 3rd, 4th and 5th scoop. The more I
consume, the less I benefit from each additional unit. This is
understood in economics as the law of diminishing marginal
benefit (or utility).
Discussion Question:
Which type of elephant did you choose? Why did you choose
the type you did and not the other?
Benefits vs. Costs, again...
Though the benefit of having an African elephant might
have been higher, it was possible to get an Asian
elephant for one third of the cost. It is not always possible
to pay the higher cost even though the benefits may be
better.
Discussion Question:
What was the last animal to make the cut for your zoo?
Marginal analysisMarginal - on the edge. Economic decisions are
marginal decisions because man as a rational being
always rationalizes decisions. Marginal also refers to
additional. Marginal analysis is examination of the
additional benefits of an activity compared to the
additional costs of that activity.
Discussion Question
What was the animal that just missed the cut for your zoo?
Opportunity cost
Opportunity cost is the opportunity lost(the next best
alternative)
When you had to make a choice fro the last animal you
had to get an animal for the loss of another.