Your cellular phone contract is due for renewal and the company offers you a new free phone. Since you want to use your new phone, you decide to recycle your old phone. Your action a. Creates wealth by moving the phone from lower value use to higher value use b. Destroys wealth since you lose your phone c. Creates wealth by making you feel richer d. All of the above

Question

Alison

Business

13 January, 11:13

Your cellular phone contract is due for renewal and the company offers you a new free phone. Since you want to use your new phone, you decide to recycle your old phone. Your action a. Creates wealth by moving the phone from lower value use to higher value use b. Destroys wealth since you lose your phone c. Creates wealth by making you feel richer d. All of the above

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Darnell Warren · Answer 1

creates wealth by moving the phone from lower value use to higher value use.

Explanation:

Wealth creation is maximised when an item is of greater value to the user. When the old phone is recycled, it has a higher value to the company.

The company will refurbish the phone and sell to a new user who will maximise it's use.

So this action creates wealth by prolonging the useful life of the old phone.

If the user had discarded the phone he would have destroyed wealth because the usefulness of the phone would have been wasted.