1. The Opportunity Cost I have made in my life and its impacts on the course my life has followed
In the first unit, I learned that opportunity cost involves doing an analysis between options based on their benefits before choosing one. This means that after one selects either of them, they have to forego the other option (Roger, 2005). The choices people make among alternatives much determine the path their life will follow. For example, during my high school days, I was not so sure whether I would continue with my education or secure a job immediately after my graduation. Not until just before the graduation that I made up my mind.
Taking a four-year course in college meant I had to pay the school fees and other unseen miscellaneous, which …show more content…
Merit and Demerit Goods
It is very interesting how people tend to be attracted to products that have less or no value to their lives. The opposite is also true. In other words, I think people put more value on products that have immediate effects in their life either negative or positive. For example, people tend to under-consume merit goods such as education, public libraries, and health services even though in some states it is free to utilize them (Charles, 1968). Instead, they over-consume demerit goods such as cigarettes, alcohol and drugs, despite their high costs and harmful effects they have in the body.
My aim is to utilize merit goods to the fullest since they are not hard to get, and their tomorrow benefits are beyond imagining. For example, I take education as a long-term investment. Although at the moment am incurring some private costs to get this education, I look forward to its benefits in the future such as higher earnings, flexibility and, of course, the acquired skills. One thing I enjoy about the government is imposing high taxes on demerit goods. This is not only the right way to control their consumption, but to increase its revenue. Heavy taxes raise their prices, making the young generation unable to afford them. This action has insignificant effects on the general or average consumption since there are many over age individuals who can still afford these high …show more content…
Some events determine how people perceive how the economy will behave in the future. These factors may change consumer confidence and influence their level of spending.
A common factor is the present financial performance. Consumer confidence changes in the case of economic imbalance. Events such as bankruptcy, an increase in interest rates, and a rise in stock prices may drop consumer confidence (Gerald, n. d). In the presence of imbalance economy, customers may tend to hold their spending since the future is uncertain. Consumer confidence also depends on the employment availability. In the case where jobs are created every day and searching for one is not a challenge, people tend to spend much of what they are currently making. However, if companies start minimizing the number of their employees for whatever reason, people will fear consume
In the first unit, I learned that opportunity cost involves doing an analysis between options based on their benefits before choosing one. This means that after one selects either of them, they have to forego the other option (Roger, 2005). The choices people make among alternatives much determine the path their life will follow. For example, during my high school days, I was not so sure whether I would continue with my education or secure a job immediately after my graduation. Not until just before the graduation that I made up my mind.
Taking a four-year course in college meant I had to pay the school fees and other unseen miscellaneous, which …show more content…
Merit and Demerit Goods
It is very interesting how people tend to be attracted to products that have less or no value to their lives. The opposite is also true. In other words, I think people put more value on products that have immediate effects in their life either negative or positive. For example, people tend to under-consume merit goods such as education, public libraries, and health services even though in some states it is free to utilize them (Charles, 1968). Instead, they over-consume demerit goods such as cigarettes, alcohol and drugs, despite their high costs and harmful effects they have in the body.
My aim is to utilize merit goods to the fullest since they are not hard to get, and their tomorrow benefits are beyond imagining. For example, I take education as a long-term investment. Although at the moment am incurring some private costs to get this education, I look forward to its benefits in the future such as higher earnings, flexibility and, of course, the acquired skills. One thing I enjoy about the government is imposing high taxes on demerit goods. This is not only the right way to control their consumption, but to increase its revenue. Heavy taxes raise their prices, making the young generation unable to afford them. This action has insignificant effects on the general or average consumption since there are many over age individuals who can still afford these high …show more content…
Some events determine how people perceive how the economy will behave in the future. These factors may change consumer confidence and influence their level of spending.
A common factor is the present financial performance. Consumer confidence changes in the case of economic imbalance. Events such as bankruptcy, an increase in interest rates, and a rise in stock prices may drop consumer confidence (Gerald, n. d). In the presence of imbalance economy, customers may tend to hold their spending since the future is uncertain. Consumer confidence also depends on the employment availability. In the case where jobs are created every day and searching for one is not a challenge, people tend to spend much of what they are currently making. However, if companies start minimizing the number of their employees for whatever reason, people will fear consume