Entry #2: Unit One Reflection

After studying economics for two weeks, I have learned that economics is the study of how we make decisions under the conditions of scarcity. Since our wants cannot all be acquired, we must make certain decisions and give up opportunities along the way. Thus, the concept of economics applies to everything we do in our daily lives.

Even if we don't think about it, we weigh the options for everything we do. During a stressful day at midnight while doing homework, we might ask ourselves: "Is this assignment more important than my sleep? Or is sleep more important?" If our grades were at risk, we would place the importance of the assignment over the importance of sleep; if the assignment does not mean much to our overall grade, we might think twice before sacrificing our sleep. This is the concept of opportunity costs and trade offs -- by choosing to do one thing over the other, we forgo our opportunity to complete the other task. The status of our grades makes up the concept of Marginal Benefit equaling Marginal Cost: we will continue to do homework until the cost of losing sleep exceeds that of finishing an assignment.

Incentives, a major source of motivation, is a factor that plays a part in economics as well as our daily lives. The incentive for doing a blog post for a economics class is the grade; if the assignment did absolutely nothing for us (or in a way so minimal that the cost of time spent on the assignment outweighs the benefit of actually doing it), there would be no reason to do it. This applies to almost every area in our lives, from studying for a test to eating food (in which, without the incentive to survive, we'd be all dead...).

There are three important questions that are asked in an economic environment: (1) What will be produced? (2) How will it be produced? (3) Who will get the final product?

(1) Goods and services that can be produced at a continuing profit will be produced. If, for some reason, the population of the United States began to demand for chocolate-flavored pencils, the chocolate-flavored pencil business would be able to make chocolate-flavored pencils at a continuing profit, therefore expanding its industry. If people stopped buying marshmallow-flavored crayons because of the sudden surge in the popularity of the chocolate-flavored pencil business, the production of marshmallow-flavored crayons would no longer yield a profit, and its industry would contract.

(2) The goods and services would be produced in a way that minimizes cost. If it takes a million dollars for a business to make a single chocolate-flavored pencil, it wouldn't make it. Instead, the business would probably exploit some other country to make the pencils for them under that circumstance -- if it didn't, the competition might be able to knock the business out of the industry.

(3) The people who are rich enough the afford the chocolate-flavored pencil (and gullible enough to not know that pencils can't be eaten) will receive the product. They are willing and able to pay for the good.

These three questions help make up the market system in which America follows. By giving people the opportunity to vote on what should be produced and what shouldn't be produced with their "dollar votes" produces a kind of efficiency that a command system would not be able to produce. The market system also incorporates specialization, private property, and freedom in both choice and enterprise. Not only can the people choose what is to be produced, they are probably happier because they at least get to own stuff.

In the third part of my first blog entry, I wrote about the products and companies that have engulfed my daily life (and the lives of many others). Without the market system, everything that I wrote about, such as the laptop that I cannot live without, the reign of many large corporations that I admire, and the career I'd like to pursue in the future, might not be possible.

Perhaps, if I lived under a command system, the thing that I would not be able to live without would be my temporary shelter, my favorite corporation would be the government, and the career I'd like to pursue would be a lifelong occupation of making nails for the central planning board. Or maybe chocolate-flavored pencils.

Entry #1: Intro to Economics

Part 1.
When I think about economics, the idea of money and economy appears in my mind. To me, economics is everything incorporating the exchange of money, goods, or any type of other currency. Economics applies to both human trade of the past (bartering for goods) and trade of the present (walking into Meijer and buying a package of Mountain Dew). Economics revolves around the concept of supply and demand and contains two different types: supply-side and demand-side. Economics also play a role in the stock market, where shares of stock can be bought and sold. Overall, its concept can be found behind everyday activities that we accomplish in our daily lives.

Part 2.
My dad trades in the stock market and believes that I should consider economics as a major in college. The concept of business also interests me, and I am eager to find out how they work. Even though taking an economics class is mandatory in the state, I feel that this class will greatly help out no matter what profession I decide to pursue in the future.

Part 3.

• The one product that I probably wouldn't be able to live without is my laptop computer. I use it almost every day, whether to surf the web, watch videos, learn, type blog entries, etc. It's almost as if the computer contains everything in one, and I believe that it is the one thing that I am most dependent on during the day.
• I honestly do not have a favorite business or corporation, but if I had to choose one, it would be a large tech company such as Microsoft, Apple, Google, or Facebook. Since technology has pretty much become an everyday necessity in the 21st century, these companies probably have the largest impacts on the things I do everyday.
• My career choice is currently undecided as of now. I would prefer a career in technology, as it is the one thing that I am most interested in, but a medical career or even one in economics wouldn't be too bad.