Economist Herman Daly characterizes neo-classical economic theory as being analogous to a biologist
Economist Herman Daly characterizes neo-classical economic theory as being analogous to a biologist trying to understand the functioning of an animal by considering only its circulatory system and ignoring its digestive system which connects the animal “firmly to the environment at both ends!” How is this analogous to neo-classical economic theory? What kind of environmental problems does this kind of neo-classical economic thinking lead to? Explain and provide examples. Must be minimum 400 words with at least 1 reference
What would be accomplished if governments passed laws requiring manufacturers to take back and reuse or recycle all packaging waste, appliances, electronic equipment, and motor vehicles at the end of their useful lives? Would you support such a law? Explain why or why not.
Sample Solution
Sometimes, a decision which appears to be easily quantified and clear cut on paper may not be so straight forward when put into practice, thus management must contemplate carefully as these decisions will ultimately determine whether a decision is correct or not.
For example, managers should not only take into accounts the costs, revenues, incomes, etc. But also the less obvious factors such as the competition environment, interest rates imposed by the government, future operating conditions and any other uncertainty associated with the costs and benefits contribution.
Stage 3 and 4 : The choice of decision rules and ranking of alternative courses of action
Making competent decisions depends on two indispensable criteria selected by managers:
- The appropriate basis for decision making
- The types of data to use in decision-making and, by implication, the types of data not to use.