How Can Economics Tuition Help Firms And Consumers Improve Decision Making?

Economics has come across to many people as a daunting subject. However, it affects everyone in virtually every aspect. Policy makers, consumers and firms all require knowledge of economics in order to make good decisions. In contrast, lack of knowledge of economics can lead to disastrous decisions. Firms and consumers can improve decision making with economics tuition.

How Can Economics Tuition Help Firms Improve Decision Making?

The business environment in every economy is becoming increasingly more competitive. As a result, firms around the world have increased cost competitiveness in order to increase price competitiveness. Many of the firms which have not done so have experienced a decline in profit. Some have suffered a worse fate as they have been driven out of the market. Therefore, it is important to increase cost competitiveness in order to increase price competitiveness. For managers of firms who lack economics knowledge, taking economics tuition from an experienced economics tutor can help them increase cost competitiveness. For example, one of the economic concepts that they will learn is economies of scale. Economies of scale refer to the reduction in average cost when the scale of production expands. Basically, this means when a firms expands its scale of production, it may experience a fall in its average cost which will enable it to reduce its price. In economics tuition, managers of firms will learn that a firm can expand by ploughing back its profit into increasing its production capacity. It can also expand by increasing its production capacity through issuing new shares, issuing bonds or getting bank loans. A firm can expand by joining with other firms which is known as a merger. A firm can also expand by acquiring or taking over other firms which is known as an acquisition or takeover. An economics tutor with teaching experience or working experience in the field should have a good grasp of the concept of economies of scale.

How Can Economics Tuition Help Consumers Improve Decision Making?

Consumers derive satisfaction, which is known as utility in economics, from the consumption of goods and services. However, they face financial constraints and therefore have to work within their budgets. Economics tuition can help consumers maximise utility, given any budget. Suppose that a consumer is considering whether buy a television or stereo system. In this case, the theory of marginal utility can help the consumer make a good decision. First, the consumer has to estimate the marginal utility which is the additional satisfaction that they will derive from the television and that from the stereo system. However, one may conclude that if the marginal utility of the television is higher than that of the stereo system, the consumer should buy the television. However, this is not necessarily the case. This is because the price of the television may be much higher than the price of the stereo system. In economics tuition, one will learn that what the consumer should compare is the marginal utility derived from spending the last dollar on the television and the marginal utility derived from spending the last dollar on the stereo system. If the former is higher than the latter, the consumer should buy the television and vice versa. Under the tutelage of a good economics tutor, one can easily master the theory of marginal utility. Getting an experienced economic tutor is especially easy in Singapore as there are a couple of good economics tuition providers such as Leaners’ Lodge and Economics Cafe.

The above examples are only some of the ways in which firms and consumers can benefit from economics tuition in terms of good economic decision making.

Click to Read Next Post

 

economics tuition, back to homepage

Economics Tuition Singapore @ Economics Cafe
Principal Economics Tutor: Mr. Edmund Quek