How People Make Economic Decisions
- Submitted by: patricksbbgirl
- Views: 954
- Category: Other
- Date Submitted: 09/27/2010 08:38 PM
- Pages: 5
- Report this Essay
How People Make Economic Decisions
University of Phoenix
ECO212
December 21, 2008
How People Make Economic Decisions
People who face trade-offs are making the decision to exchange one thing of importance for another. When you wake up in the morning you start your day with making a trade-off decision. Should I sleep in a little longer or get up and start moving? Choosing to sleep longer will make you feel better, but will you make it to work on time or make that important meeting or appointment? The trade-offs are based on what you feel is more important. You enjoy getting a little more sleep, but maybe that important meeting will help advance your career or maybe a raise is involved. These are the trade-offs that need to be considered. A recent example is a decision to sell our 2008 spring calves to a friend for a trade of his registered horses. We thought this would be a great trade, as we didn’t have to give shots, castrate, and tag the new calves. The horse market is extremely bad, so we weren’t able to sell as many horses as planned. Our income would have been higher if we had kept the calves.
The cost of something is what you give up to get it. While the cost of a good or service often is thought of in monetary terms, the opportunity cost of a decision is based on what must be given up (the next best alternative) as a result of the decision. Any decision that involves a choice between two or more options has an opportunity cost (NetMBA.com, 2002-2007). This is a big decision for many older adults who have embarked on returning to school. Time is such a luxury that sometimes it is taken advantage of. A prime example is my decision to return to school. I have gone back and forth trying to figure out a way to make everything work. I always said if you can put 48 hours into a 24 hour day, my life would be so much easier. That will never happen so I must design a plan that will allow me opportunity costs. I will need to obtain my...
University of Phoenix
ECO212
December 21, 2008
How People Make Economic Decisions
People who face trade-offs are making the decision to exchange one thing of importance for another. When you wake up in the morning you start your day with making a trade-off decision. Should I sleep in a little longer or get up and start moving? Choosing to sleep longer will make you feel better, but will you make it to work on time or make that important meeting or appointment? The trade-offs are based on what you feel is more important. You enjoy getting a little more sleep, but maybe that important meeting will help advance your career or maybe a raise is involved. These are the trade-offs that need to be considered. A recent example is a decision to sell our 2008 spring calves to a friend for a trade of his registered horses. We thought this would be a great trade, as we didn’t have to give shots, castrate, and tag the new calves. The horse market is extremely bad, so we weren’t able to sell as many horses as planned. Our income would have been higher if we had kept the calves.
The cost of something is what you give up to get it. While the cost of a good or service often is thought of in monetary terms, the opportunity cost of a decision is based on what must be given up (the next best alternative) as a result of the decision. Any decision that involves a choice between two or more options has an opportunity cost (NetMBA.com, 2002-2007). This is a big decision for many older adults who have embarked on returning to school. Time is such a luxury that sometimes it is taken advantage of. A prime example is my decision to return to school. I have gone back and forth trying to figure out a way to make everything work. I always said if you can put 48 hours into a 24 hour day, my life would be so much easier. That will never happen so I must design a plan that will allow me opportunity costs. I will need to obtain my...