How I Use Economic in My Daily Life
Economic is the study of choices and behaviours. Economics focuses on why we make the choices we do. And what the implications or effects of those choices are. Of all the concepts within economics, supply and demand is perhaps the most well-known by the general public. In economics, we call the point of agreement equilibrium. In other words, the buyer’s price and the seller’s price are now “equal. ” For example, in E-bay people bid on items for sale for a given length of time. When time expires, the one who bids the most get it. Normally we would not pay more for something that’s not as good as something else.
We’ll only pay less to compensate for the lower quality. Although the quality is low, what is important is that we are able to use the product. When our budget cannot fit higher quality products, there’s nothing wrong in going for a cheaper substitute product. For example, some famous household products like Nestle, Milo, food varieties are all high in quality and also price. I usually buy the same product but produced in a lower price such as Tesco products. For me the quality is as good as the famous brands but it’s cheaper in price.
A basic principle in economics is the concept of opportunity cost. Economic theory would evaluate the pros and cons of going with any of these decisions. In other words, it would show you what you’d be giving up and gaining with each. By purchasing a product which is not high in quality my require us to sacrifice our taste senses. If seen in a positive angle, we can not only save a lot of money, but also use the money saved for more products. When shopping for necessities, it is important to analyse the price and quality offered by them besides knowing the opportunity cost of it.
I do apply this concept when purchasing products for household use. We as a consumer should be able to make proper choice which will benefit us. This same principle can be used when deciding whether to start a business, leave a job, or accept a promotion or pay cut. When we were to use or consume something, we tend to go for satisfaction that can guarantee maximum utilization. The benefit we get from a service or product must be able to correspond to their value of money that we use to obtain it. Besides these, I also use the same concept when have to travel around.
Since public transportation is cheaper and convenient we can save a lot of time and money making use of the convenience of public transportation. They also offer some special privileges to students and also elderly people who choose to use public transportation. Own transportation although provide a more comfortable travelling experience, there also extra costs that we have to bear such as petrol, toll charges, and also fatigue. Since the price of petrol is increasing day by day, the demand is becoming more less and it is wiser for people to choose to travel by public transportation.
Moreover it will helpful for me after I finish my studies to find a proper job that suits my qualification also the opportunity cost that I have lost during the study course of my degree. When choosing a job I will make sure the pay is worth my qualification and also the opportunity cost I have lost. Life is all about making choice. We must be able to make good choices that will benefit us financially especially. The use of Microeconomic knowledge in a way can be very helpful.