Only a small group of economists probably like it.
Microeconomics and macroeconomics the study of the larger aggregate economy together make up the two main branches of economics. So how do the principles of microeconomics affect everyday life? Most people have a limited amount of time and money.
They cannot buy or do everything they want, so they make calculated decisions on how to use limited resources to maximize personal satisfaction. Similarly, a business also has limited time and money. Microeconomics Principles Microeconomics uses certain principles to explain how individuals and businesses make decisions.
One of the basic principles of microeconomics is that individuals make decisions to maximize their satisfaction. In microeconomics, this is called maximizing utility.
Another economic principle that comes into play as consumers make decisions is an opportunity cost. When an individual makes a decision, she also calculates the cost of forgoing the next best alternative.
For instance, if you use your frequent flier miles to take a trip to the Bahamas, you will no longer be able to redeem the miles for cash. The missed cash is an opportunity cost. Diminishing marginal utilityanother economic input, describes the general consumer experience that the more you consume of something, the lower the satisfaction you get.
For instance, when you eat one burger you may feel very satisfied. But if you eat a second burger, you may feel a lesser amount of satisfaction than with the first burger.
Two other important economic principles are supply and demand. Market supply refers to the total amount of a certain good or service available on the market to consumers, while market demand refers to the total demand for the good or service.
The interplay of supply and demand helps determine prices for a product or service, with higher demand and limited supply typically making for higher prices. In a city like New York, there is a limited supply of housing and high demand. To rent an apartment, first, you must determine a budget.
For this, you will have to take into account your income and how much money you are looking to spend on housing, in such a way as to maximize your utility or satisfaction. If you allocate too much of your income to rent, you will not have a lot of money left for other expenses. Thus, you will have to decide what is the most amount of money you are willing to part with, what amenities you must have in your apartment and acceptable neighborhoods.Economics and My Daily Life Economics and My Daily life Stevens-Henager College Abstract Economics is a daily part of our lives I will be discussing how certain areas of economics affects my life these will include principles 2, 4 and 5of economics.
Economics in My Life When I was first given this assignment I was extremely perplexed at how I would even begin to finish it. I had no idea how economics related to my life in anyway. Economics of Daily Life Essay Words | 5 Pages.
Economics of Daily Life Leah Hand Stevens-Henager College Economics of Daily Life Economics is . Economics began affecting your life before you were born, playing a role in what kind of health care your mother received during pregnancy and where your parents lived.
Few aspects of life are not affected by the allocation of resources. The flow of money and goods from person to person has an. To help understand how microeconomics affects everyday life, let’s study the process of renting an apartment.
In a city like New York, there is a limited supply of housing and high demand. Economics is a social science that deals with the life-cycle of goods and services. It is a study of how innovation and finance revolve around the basic human needs and wants to provide products and.