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Economics and the Environment Worksheet
ECO/370 Version 5
1
University of Phoenix Material
Economics and the Environment Worksheet
Respond to each question with a minimum of 150 words.
1. What is willingness to pay? How does this relate to the concept of demand?
The willingness to pay can be referred to as the maximum amount of money that a buyer is
willing to pay in order to acquire a certain product or services, this is function of the
associated benefits, quality, and seasonal demand, in general from standard economic view.
This corresponds greatly with the concept of demand, a closer look at the demand curve
which expresses the relationship between the price of a product and the quantity demanded
by consumers, it reveals the consumers, willingness to pay a particular amount of money for
a product or service. It is important to state that as the price for a particular product or service
increases, more consumers leave the market for the product in question because they are
not willing to pay the higher price. Likewise, as the price of the product or service declines,
more buyers enter the market because they are willing to pay the lower prices
2. When determining the cost of manufacturing a product, what considerations are included in
the cost? Provide an example of a product and explain each consideration in relation to your
example.
When determining the cost of manufacturing a product, several determinants are considered
by the manufacturer, so as achieve economic efficiency in manufacturing products with more
values than the cost of production of the product. Therefore, the manufacturer will set the
value of the product based on these determinants; Availability of raw material plays one
major impact on the cost of production such that if the cost of the raw material is high then
the cost of production will be high. The closeness of the raw material play can influence the
cost o...