Friday, September 7, 2012
Who feeds Paris?
What did Wheelan mean by "who feeds Paris?"
When Wheelan asked "who feeds Paris?" he was referring to the global markets of the world. Somehow around the world, stores are fully stocked with goods that were shipped from almost anywhere you can imagine. Yet you hardly ever walk into a CVS or Walgreens and find out that they don't have the medicine that you need. The market uses supply and demand to determine the price of an object which helps to make sure that objects don't get either over or under produced. There is a certain formula that comes up with the exact price of an object based on how many you have to sell. You don't want to the price to be over-expensive because then you won't sell enough but if you underprice it then you sell out when you could have made more money. He uses an example of airplane tickets, and explains to us how the airlines are smart enough to market to two different types of customers in order to get as much money as possible.
Wednesday, September 5, 2012
Decision Making
Based on what you have learned in class, discuss at least three economic concepts that are significant when making a personal decision. Use a personal or social example to address how the concepts that you have identified are relevant.
A marginal cost is when a person makes a decision on the margin which means that the cost cannot be greater than the benefit. For example, if your friend invites you to go shopping on Black Friday but the night before it you go to sleep really late - you must evaluate if you would rather sleep or go shopping for sales. Depending on what seems like a better option to you, you will decide what to do. If the sleep sounds better than a few sales, it wouldn't make sense to go shopping at 4am.
A trade-off is a situation where in order to do something you must give something else up. For example, if I wanted to go visit colleges today I would have to give up and miss school because I would not be able to do both.
An opportunity cost would be the next best thing you would be able to do. So if I use the same example as earlier and decide to go visit colleges instead of going to school then the next best thing I would be doing would be going to school. My opportunity cost for visiting colleges would be going to school.
After these three examples, it becomes obvious that we are always making decisions whether we think about it or not.
A marginal cost is when a person makes a decision on the margin which means that the cost cannot be greater than the benefit. For example, if your friend invites you to go shopping on Black Friday but the night before it you go to sleep really late - you must evaluate if you would rather sleep or go shopping for sales. Depending on what seems like a better option to you, you will decide what to do. If the sleep sounds better than a few sales, it wouldn't make sense to go shopping at 4am.
A trade-off is a situation where in order to do something you must give something else up. For example, if I wanted to go visit colleges today I would have to give up and miss school because I would not be able to do both.
An opportunity cost would be the next best thing you would be able to do. So if I use the same example as earlier and decide to go visit colleges instead of going to school then the next best thing I would be doing would be going to school. My opportunity cost for visiting colleges would be going to school.
After these three examples, it becomes obvious that we are always making decisions whether we think about it or not.
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