week 3 Please help, Freedom of choice allows all markets to allocate economic re
ID: 1130346 • Letter: W
Question
week 3
Please help,
Freedom of choice allows all markets to allocate economic resources and answer the big three economic questions. Adam Smith's, Wealth of Nations (1776) referred to this as the invisible hand" of the market- individual's doing what is best in their self-interest could ultimately end up serving the common social interest. Explain if the scenarios below impact the self-interest only; the social interest only, or both the self and social interest. For which one would there be a conflict of self and social interest? 1. Microsoft offers free upgrade to Windows 10 for users 2. McDonald's Offers Gourmet Coffee 3. The proposed Keystone XLPipeline 4. Food Must Be Labelled with Nutrition Data 5. Executives at Enron Corporation using unscrupulous accounting tactics to show increased profitsExplanation / Answer
1. Microsoft offers free upgrade to Windows 10 for users
It is purely a self-interest mechanism. Since Microsoft doesn’t want its users to use any other software, it offers free upgrade to Windows 10 for users. The decision to offer offers free upgrade to Windows 10 for users is to keep its existing customers.
2. Mc Donald’s offers Gourmet coffee
McDonald’s decision to serve Gourmet coffee is made on the self-interest. It wants to capture the coffee market as well to earn more profits. More people will drink coffee rather than other drinks.
3. The Proposed Keystone XL pipeline
The Proposed Keystone XL pipeline impact mainly self-interest (Canada) which creates social interest as it offers a safe, reliable and environmentally responsible way to deliver crude oil to markets in the U.S. It will create new jobs in the market.
4. Food must be labelled with nutrition data
This decision is made in the social interest. This is done by all the firms and in the best interest for everyone.
5. Executives at Enron Corporation using unscrupulous accounting to show increased profits
It impacts the self-interest only.
For the third one, The Proposed Keystone XL pipeline, there would be conflict of self and social interest.
The Proposed Keystone XL pipeline impact mainly self-interest which creates social interest as it offers a safe, reliable and environmentally responsible way to deliver crude oil to markets in the U.S. It will create new jobs in the market
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