The principles of economics influence your decision-making, interaction with others, and the economy as a whole. Give one example of how you are personally affected by each of the three areas. Are you affected positively or negatively? Explain your reasoning. How do budget constraints and personal preferences affect your choices as a consumer?
2007-08-21 13:39:57 · 8 answers · asked by karen 2 in Social Science ➔ Economics
I'm an economics major. Studying the basic principles of economics has altered my decision making in some sense. I'll think of opportunity cost, etc. when it comes to buying things, but when it comes to my time, I don't really think about that so much. I find that having my life follow rational principles of economics takes all the spontaneity out of it, and it just isn't fun; however, I believe it has influenced me at least a little bit.
I am affected through the economy because I am a consumer. By being a consumer I am a part of the system. Through elasticity/inelasticity I am at the whim of whoever is making the decisions at the top with some items [i.e. gasoline].
2007-08-21 14:01:54 · answer #1 · answered by Prodigal 2 · 1⤊ 0⤋
Economic Decision Making Principles
2017-01-12 16:10:35 · answer #2 · answered by Anonymous · 0⤊ 0⤋
I think Meg is right, but I would exaggerate more and say that the principles of economics are really descriptive. I like the analogy to pool and physics. People play pool and naturally or instinctively push the stick at the balls. But there are also a myriad of physical laws and parameters like speed, inertia and so on. Just as physics is of little help to the pool player, I doubt economics is much help to the consumer.
Someone mentioned that rational people 'think at the margin'. I think that is what is wrong with economics. You invent a descriptive which assumes calculus, then conclude everyone must conform to it. In fact, if you use set theory, you realize that all your doing or saying is to maximize among the alternatives. They can be continuous and differentiable or not. You can think of the margin, or the whole, it makes no difference. And when you conclude that people simply do what is in their judgment to better themselves, you realize just how empty and meaningless this kind of economics is. Everyone knows that when they go to the store, they can't spend more than they have. Everyone knows if they buy so many carrots they can't buy so many apples. And so on.
2007-08-21 15:13:31 · answer #3 · answered by Anonymous · 0⤊ 0⤋
If the principles of economics is correct they effect everybody's market behavior weather or not they have ever heard of them. When I shop, especially for big ticket items, my budget constraint is my first consideration. I do not look at $50,000 cars or million dollar houses. Nor do I eat in restaurants with $100 meals, which I could "afford" but my utility function, or preference tell me that I would enjoy spending the $100 more on other things. Gaining knowledge of economics did not change my shopping behavior but it did change how I invested, I am much less optimistic about my ability to beat the market over the long term.
2007-08-21 14:55:35 · answer #4 · answered by meg 7 · 0⤊ 0⤋
The economic principle that defines my descion making is the law of either or. In any free economy, there are two classes of people, consumers and producers. The difference between the two groups lies in how they spend disposable income. Consumers use their disposable income to finance spending on luxury goods like cars, boats, and flatscreen tvs. Produces use their disposable income to purchase assets; such as real estate, computers, and fax machines. I plan to become rich, and to get there I must behave like a producer.
2007-08-21 14:27:18 · answer #5 · answered by Crookedlettaman 4 · 0⤊ 0⤋
Only two laws rule the universe. Law of Conservation and Law of Equilibrium are the two laws. Law of Conservation is the cause and Law of Equilibrium is the result. You can not find a single law or principle of any branch of knowledge that is not a prolonged version of these two laws. Human behavior has no role to play it only obeys these two laws. Unfortunately economists have neglected these two laws even though all their classical theories are based on these two laws.
2016-05-19 03:07:26 · answer #6 · answered by ? 3 · 0⤊ 0⤋
Rational people think at the margin.
Actually, all of the "10 principles of economics" illustrated by Mankiw are pretty solid..
2007-08-21 14:40:28 · answer #7 · answered by Anonymous · 0⤊ 0⤋
Only if I can afford it.If I do not have enough I am willing to save.If what I want can not be substituted. LOL
2007-08-21 14:47:12 · answer #8 · answered by yp_will_chicago_369 6 · 0⤊ 0⤋