{

Photo Essay:Thinking Like an Economist

Derick Johnson

Jeff Smith Chevrolet Byron, GA

• Sales Department• Vehicles – New and Used

• Cars• Trucks• SUVs

• Auto Financing• Auto Leasing

• Service Department• Parts • Repairing Vehicles

Factors of Production

Get a business planTake to bank for a loan

Buy land to build the business onFind a contractor to build buildingBuild the buildingPurchase vehicles to saleHire people to workSalesOfficesService Department

Advertisement

Opportunity Costs

• Customer may have to take a day of work off because of car shopping and contract signing

• Customer may have to wait for a vehicle if they want to special order a vehicle.

• Customer may have to pay more for a vehicle than they already are paying.

Trade Off

1. While the building is being built – He is not making any money. So, no income.

2. Having to spend a lot of time at the building and getting everything ready to open, so he is missing time away from his wife and children.

3. Not being able to go play golf because he is working at the business training people.

Fort Valley, GA

1. Peaches2. Pecans3. Citrus Berries4. Jam, Jellies, Preserves5. Pies6. Salsa7. Muffin Mix8. Breads9. Gift shop items10.Dressings11.Candies12.Ciders13.Syrups

Factors of Production

LandPlantsTreesEmployees

Picking EmployeesOffice EmployeesPackaging EmployeesStore Employees

BuildingFarm EquipmentPacking SuppliesConveyersGift Shop ItemsEmployee UniformsIce Cream Shop Equipment

Tables and Chairs for customer seating

Opportunity Cost

Customer will have to pay for gas in a vehicle to get to Lane’s when they can go to a more convenient grocery store.

Trade Off?

He gave up some of the family money to get things started. Then he had to spend a lot of time getting peach trees planted. It originally started out as just peaches and then grew into the business that it is today.

He spent a lot of time away from his family to start the business and then had to spend a lot of time away from then when it was started because of the growth until he hired more and more employees to do the job for him.

• Assistance of a real-estate agent instead of having to find one yourself. Letting the real estate agent do all the work.

• Real estate agent does all the contracts.• Purchasing of residential and commercial

property• Leasing of residential and commercial

property

Factors of Production

Real-estate SchoolReal-estate LicenseBuilding to work out ofFind clienteleOffice suppliesComputer programsOffice chairs, computer, desks

Opportunity Cost

Customer having to pay agent fees.Taking time off from work to look at

houses.Taking time away from house work to

look at houses.Taking time off of work to close on the

house, when one is found.

Trade Off?

• Having to work up under a Broker for two years before you can open your own business.

• Being away from family going to school to get license

• Being away from family when having to show houses in the evenings.

• Constantly getting calls from customers about houses even after working hours.

Goods and Services

• Wine Tasting• Sell Bottles of Wine• Snacks to offer when wine

tasting.

Factors of Production

• Land for building and vineyard• Loan for building and vineyard• Seedlings for vineyard• Bottles for wine• Equipment to make wine• Employees to pick vines• Employees to help in store for wine tastings• Farm equipment• Wine glasses• Tables• Table Clothes• Plates and silverware for food• Food – snacks• Cooking equipment and utensils• Decorations for store

Opportunity Costs

Customers may need a babysitter to come to the wine tastings.

May need a driver that will not drink –designated driver.

Trade Off?

Mr. Bill gave up family time to start and run the business.

Mr. Bill gave up retirement/resting time to run the business.

Good and Services

• Birthday Party Rooms• Provides paper plates, utensils, and napkins

• Bounce Houses• Slides and waterslides• Obstacle Houses• Snacks

• Ice cream• Pucker powder• Chips• Candy and popcorn• Soft drinks

Factors of Production

• Finding a building • Purchasing slides and games• Purchasing tables • Purchasing party supplies• Purchasing drink fountain

machines• Purchasing snacks and candy• Hiring employees

Opportunity Cost

• Cost of having party at Party Playground would be pricier than having it at home

• Having a day of quiet at home vs a loud building full of children

Trade Off?

• Having to take time away from other businesses that he owns to start this one.

• Taking more time away from family to start a new business