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Author Question: How can a focus on the original cost of a product distort economic decisions? What will be an ... (Read 56 times)

tth

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on: Jul 28, 2018
How can a focus on the original cost of a product distort economic decisions?
 
  What will be an ideal response?

Question 2

The 1920s represents the dawn of commercial radio. How would those investors interested in the new technology decided what growth possibilities there were? Would knowledgeable investors have drawn straight lines on regular or on semilogarithmic
 
  graph paper? Why?


aadams68

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Reply #1 on: Jul 28, 2018
Answer to Question 1

The total cost of something does not always depend on the original price because
the object can have residual value.

Answer to Question 2

Many people did invest in radio in the 1920s and became quite rich. William
Paley, who formed the Columbia Broadcasting System, is an example. These investors
might not have known about exponential growth, but they sensed the possibilities and it
excited them. The Great Depression dampened their rewards for many years, but they did
make a lot of money in the end.


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