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Assignment: Macro & Micro economics Question one I disagree with Mr. Friedman that the sole social responsibility of a business is making profits for its owners. A business has got both legal and moral responsibilities. As society we agree that corporations are capable of responsibilities and that they must adhere to the regulations of the game outside those that are codified into a legal act (especially concerns that usually cross borders and thus are subject to several and at times contradictory laws), the fundamental premises behind Mr.

Friedman’s argument collapses (Bryan, 2010). Complying with the required limits in law may keep corporations out of courts, but businesses are ware that holding themselves responsible to a high standard will stand them in good stead as far as their employees, customers, suppliers, communities, regulators and shareholders are concerned. This therefore means that any enterprise if at all it wants to be sustained over a long period of time must maximize its proceeds; nevertheless it should do so in a way that meets the requirements of its stakeholders who in essence allow it to stay viable.

When there is a change of those requirements, corporations have got a responsibility to become accustomed to their actions accordingly, if at all they wish to survive. This is the aspect missed by Friedman’s argument. The game and its rules have changed in indispensable ways –and customers today anticipate and even demand more of a corporation than basically that they increase their returns without coming to anguish by some breach of law. Customers require and anticipate attributes from what they purchase-safety, value, quality-which of course depends on the price they have paid (Bryan, 2010).

Employees on the other hand require more than just a paycheck and the society needs the enterprise to be a better corporate citizen and employ from the community. Regulators require corporations to adhere to the legal line, communities frequently require companies to go an extra mile and do more than is needed of them; leading to a lot of strategic philanthropic efforts that are an aspect of ,but nevertheless don’t by themselves comprise a responsible company, particularly if they seem to be like giving back for a business culture or model that is not desirable (Bryan, 2010).

Question twoBreak-even point is that point at which a product stops costing Sarah’s company/enterprise money to produce, and sell, and thus starts making a profit for the company. Her total expenses for this enterprise are ($12,000+148000=160,000) plus her salary of $35,000.The business will have to earn over $195, 000, in order for her to breakeven (Michael, 2010).Economically, Sarah’s breakeven point will be that point in time when the total cost or rather expenses incurred and the total revenue generated will be equal.

This therefore means that there is no net gain or loss and thus Sarah’s business will have “broken even.”In this case therefore there is no profit or loss that has been made, even though the opportunity costs will have been “compensated” and the capital employed will have received the risk-adjusted, expected return. What this simply implies is that all the costs of Sarah’s business that needs to be paid will have been paid by her company but there is no profit gained which is an equivalent of 0.

Sarah’s business will have to earn $195,000 in order to reach the break-even point in terms of economics (Michael, 2010).If Sarah buys the building, her business will have to earn $182,000 in order to break even in economic terms. This is the total amount of cost that Sarah’s business is incurring, i.e. $35,000 + $ 148,000=$182,000) This is because rent ($12,000) will no longer be a cost to the business since it has been taken care of by buying the building (Michael, 2010).ReferencesBryan, H. (2010). Corporate Social Responsibity in the 21st Century:Debates,Models and Practices Across Government,Law and Business.

Massachusetts: Edward Elgar Publishing,Inc.Michael, C. (2010). Breakeven Analysis:The Definitive Guide to Cost-Volume-Profit Analysis. New York: Business Expert Press,LLC.