Economics defined as a study of mankind in the ordinary business of life; it examines that part of individual and social action which is most closely connected with the attainment and with the use of the material requisites of wellbeing. Thus it is on one side a study of wealth; and on the other, and more important side, a part of the study of man. Economics not just study about the economy of country, inflation rate or stock market. I have learnt that economy is all related to our lives.For example we buy a shoe or a shirt, we are making economic choices.
Economics is about choice, all kinds of choice. We are making economic choice about marriage or single, sick or healthy and even life or death. We have to decide whether catching that worm is worth sacrificing sleep to wake up before all the other birds in the morning. Those decisions are economics. If there were no scarcity, you could have everything you want right now. You wouldn’t have to make hard decisions or trade-offs.But in the real world, there is scarcity, and because there is scarcity, we have economics, the study of how individuals, firms, and entire nations deal with the limitations imposed by scarcity to prioritize and allocated limited income, time, and resources.
The opportunity cost of doing this article is that I could have spent my time doing something else. However, I would not have learned about how economics affects your daily life. Understanding what I have given up in order to do or buy something is another important economic concept, as it helps me make better choices.In the subject of economic, I have learnt the word “scarcity”. A resource is considered scarce when its availability is not enough to meet its demand. Life is beset with scarcity and unfulfilled wishes. Scarcity forces us to choose, but what choices are best? Every choice to pursue one goal is a choice to sacrifice another.
For example, time is scarce. In this fast pace society, everyone want fast and efficient. Therefore, restaurants that have not shifted to “fast food” techniques have lost ground.The opportunity cost of the time spent in preparing fresh meals for each customer is greater than most of us are willing to pay.
Furthermore, I have read a very interesting article about the women nowadays and apply it to economic. The ability of women to earn competitive wages has fundamentally altered the costs and benefits of marriage, especially from the women’s perspective. Nowadays, there are changes on the status or the ability of women in social, the women able to find a high paid job, and yet there are less women choose to marry. The ability of women assume to the price of women.
I have come out a conclusion, the higher price of women, the lower quantity of women want to marry. Each choice has an opportunity cost. The opportunity cost of earning RM 10 per hour is that we do not have time to study. This could lead to a lower Exam result, which could lead to lower future earning potential.
Choosing to maximise our income in the short term (earning RM 100 a day) may reduce our lifetime earnings and could be a poor decision -unless working in a cafe doesn’t affect our future earnings. We may feel job experience more useful than an essay on allocate efficiency.The problem is that when making decisions about whether to study, work or pursue leisure, we may forget or ignore long term effects.
Deciding to spend all our free time earning RM100 per day is something we may regret later in life. Economists suggest education is a merit good – meaning people may underestimate the benefits of studying. Under consumption of education is an example of market failure. When making decisions we do not tend to first look at leading economic indicators. But, perceptions about the economic outlook can influence certain decisions.For example, those aware of the current economic situation may be aware the depth of the recession which makes a period of low interest rates more likely.
This suggests that if you could get a mortgage, mortgage payments would be cheaper, but, saving would give a poor return. However, the bad state of the economy and high unemployment rate is a factor that may encourage students to stay on and study. Since youth unemployment is currently very high, it makes more sense to spend three years getting a degree rather than going straight on to the job market.The only problem is that many other students are thinking the same.
Hence the competition for university places is becoming much stronger. Education offers a final example. As with live theatre, the basic technology has changed little over time. We still rely on the same teachers lecturing to the same students taking notes with the same pencils in the same desks.
Teachers cannot talk any louder or any faster; they cannot turn out any more students per hour than they did one hundred years ago. Productivity increases have been minimal and its relative cost has risen. Do you think a college education is expensive now?Barring some unforeseen technological breakthrough, just wait and see how pricey it becomes fifty years down the road. In conclusion, considering opportunity cost can help us make better decisions. If we act on instinct, we may choose the most pleasurable or easiest course of action, but the best decision in the short term may not be best in long term. In my opinion, I think that economic is every important and a subject that compulsory all the students to study because it has closely related to our daily life. After studying this subject, it causes me to make decision logically and wisely.