what ECONOMIC CONCEPT is this?

Question

My teacher gave us this scenario for our economics class and I need help with it.

"I made a comment to our attorney, who had put in quite a bit of time on a case that was settled after fourteen years. My remark was that his firm had not made a lot of money on the case, and his reply was that it was especially true considering all the business they had turned away in the past fourteen years."

What economic concept does this attorney understand? Why?

Chigga,

I think that sounds right. How can you explain that though? I appreciate your assistance!

Answer 1

opportunity cost

Answer 2

Opportunity cost is right.
Clearly he was pointing out that not only did he not have a great return on investment in the case, but also was foregoing cases with a better return.
Why someone might decide to make such a decision is speculative, but people often select an option that may not have the highest return, for personal reasons, or perhaps they see some other benefit, such as promoting the frim, helping a friend, establishing the firm as a specialist, etc.

Answer 3

I can't truly put what economic concept that would be since it was his choice to turn down businesses so whatever income opportunity was lost was his doing. He was speculating on a big return if he put his resources in that particular case. So i would say it was more of a management decision not that of economics. There was a demand for his services but he opted not to. So it was a judgment call.

The closest i could come up with is what the other one said was opportunity cost. The simple definition of opportunity cost is the cost of an economic decision. He lost opportunity to earn from his regular profession because he was thinking of putting his resources into the case on the basis of bigger opportunity to earn.

However, lawyers don't think on economic concepts. They think about possibilities.

Answer 4

Economic concept? I guess cost/benefit would be the simpliest answer.

Edit: The easiest explaination is this. The cost of the firm solving the case are:

Costs of paying for lawyers, and court costs but most importantly lost cases that the firm couldn't take due to this case. This cost would be all the potential winnings these other cases would've yield...possibly in the millions. The Benefit of this case would be the monies earned from the conviction, and possibly other cases for this client, if at all possible.

In costs benefit analysis, you take into account missed potential earnings as costs.

Answer 5

Malthus concept That inhabitants will improve in a geometric ratio, while nutrition grant will improve in an arithmetic ration. whilst conserving authentic interior the elementary experience, that's an misguided concept because of the fact he did no longer incorporate different subjects in his calculations, e.g. advances in technologies

Answer 6

seems most uneconomical.