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: Benefits vs. costs 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 analysis- Marginal - 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.