Question 2

Assume that you are the vice president of movie production for a major Hollywood studio. Compose a memo to your film's finance team justifying the hiring of scientists and mathematicians to act as consultants on your film.

Use the concepts of scarcity, opportunity cost, trade-off, monetary incentive, marginal benefit, and marginal cost appropriately in your summary.

(Note: Use your answers from question 1 to guide your response.)

Hiring scientists and mathematicians as consultants for a film production involves opportunity cost, marginal benefit, marginal cost, and trade-off in resource allocation.

Explanation:

Scarcity is the fundamental economic problem of having unlimited wants and needs with limited resources. Two causes of scarcity are limited resources and unlimited human wants.

In this scenario, hiring scientists and mathematicians as consultants for a film production involves opportunity cost, the cost of the next best alternative foregone. By hiring these experts, the studio incurs a monetary cost but gains unique insights, representing the marginal benefit over the marginal cost of hiring them.

The decision to bring scientists and mathematicians on board showcases the trade-off between investing in their expertise to enhance the film's accuracy and the potential revenue generated from an improved movie outcome.

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