In a market economy, almost everything is owned by individuals and private businesses- not by the government. Natural and capital resources like equipment and buildings are not government-owned. The goods and services produced in the economy are privately owned.

A mixed economy combines elements of tradi- tional, market, and command economic models to answer the three basic economic questions. Because each nation’s economy is a different blend of these three economic models, econo- mists classify them according to the degree of government control.

Because of scarcity every society or economic system must answer these three (3) basic questions:

• What to produce? ➢ What should be produced in a world with limited resources?
• How to produce? ➢ What resources should be used?
• Who consumes what is produced? ➢ Who acquires the product?

The value of life is an economic value used to quantify the benefit of avoiding a fatality. It is also referred to as the cost of life, value of preventing a fatality (VPF) and implied cost of averting a fatality (ICAF).

We value life — all life, but especially human life — based on it’s potential. We look at animals and people and make judgments about what they can do with the life they have, in terms of their experiences and contributions to society. Their lives are valued because of perceptions of potential.

The VSL would be calculated in this manner: $200 [The increase in taxes per voting tax payer] X 100,000 [The number of voting tax payers] /5 [the expected reduction in cancer deaths from 5 to 0] = $4,000,000 per statistical life; $20 million dollars would be needed to save five statistical lives.

Important Values in Life

• Love. Love is the most important of all values in life, but is mostly misconstrued and misunderstood, due to its broad expanse.
• Honesty. The earlier this second most important value is instilled in your heart and mind, the easier and more fulfilling will your life be.
• Respect.
• Discipline.
• Determination.
• Understanding.

Economists say each human life is worth about $10 million dollars.

What Is Economic Value? Economic value is the value that person places on an economic good based on the benefit that they derive from the good. It is often estimated based on the person’s willingness to pay for the good, typically measured in units of currency.

What is Economic Value Added?

1. EVA = NOPAT – (WACC * capital invested)
2. WACC = Weighted Average Cost of Capital.
3. Capital invested = Equity + long-term debt at the beginning of the period.
4. Tax charge per income statement – increase (or + if reduction) in deferred tax provision + tax benefit of interest = Cash taxes.

Economic Value Added (EVA) is important because it is used as an indicator of how profitable company projects are and it therefore serves as a reflection of management performance. It includes the balance sheet in the calculation and encourages managers to think about assets as well as expenses in their decisions.

During the 1990s, EVA was promoted most heavily by Stern Stewart, a New York based consulting firm. The firm s founders Joel Stern and Bennett Stewart became the foremost evangelists for the measure.