This website uses cookies to ensure you have the best experience. Learn more

3 Economic Principles You Can Apply To Your Life

702 words - 3 pages

Time to rewind back to Economics 101. The beautiful topic of Economics is based on the principal of scarcity: we have a limited amount of time and resources available to us and must make choices of how to allocate what we DO have. In college, this means balancing the 3 S’s: Sleep, Studying and Socializing. Take a look at the following three principles and think about how you can apply them to your own life.

Opportunity Cost

This balancing act presents an opportunity cost: what you need to give up to attain what you2384185522_71ae7b4334_m want. For example, you can choose to study for an exam or go party with friends. If you choose to study, your opportunity cost is partying with friends. Opportunity costs do not always have a monetary value associated with them, rather, the cost is: anything of value to the person assessing the situation including energy and time.

We are faced with many situations where evaluating opportunity cost can ...view middle of the document...

Perhaps easier said than done for most twentysomethings, when we are still in the stage of figuring out what we want and value. We are so accustomed to listening to our professors, parents and bosses. But, at some point we need to figure out what WE value and want for ourselves.

Sunk Costs

Sunk Costs are costs that are already incurred and cannot be changed regardless of what action we take. For example, a gym membership that you’ve never used or a car you’ve already purchased. A dangerous trap is the irrational thinking of “well, I’ve already put so much money and time into this so I might as well just keep going.” In many cases, this type of thinking leads to throwing “good money at a bad investment.”

Instead, it is more economically rational to think of your decision going forward and leave your past expenditures out of it; your money and time are already gone. From there you can determine your values and use the principal of opportunity cost to make your decision.

The Law of Diminishing Returns

1933599909_d5dde5519e_mThe law of diminishing returns states that if one factor of production is increased while the others remain constant, the overall returns will relatively decrease after a certain point. “For example, if more and more laborers are added to harvest a wheat field, at some point each additional laborer will add relatively less output than his predecessor did, simply because he has less and less of the fixed amount of land to work with.” (

Here are some real life examples that might make more sense:
-Eating your 4th hot dog brings you less satisfaction than your first or second did.
-A drug addict needs more and more of a drug to feel the same pleasure he did from his first high to get the same effect.
-An extra hour of studying at 2am is less productive than your 1st hour of studying at 9pm was.
There are mathematic ways of calculating the point at which your action has less of an effect. The truth is, being aware of this basic principle should help you keep things in check in terms of spending money, buying too many new shoes, over eating, sleep, work etc. At some point the things you do in your daily life have a diminishing return.

Other Papers Like 3 Economic Principles You Can Apply to Your Life

Using the Data and Your Knowledge of Recent Economic Events, Assess the Contribution That Fiscal and Monetary Policies Can Make in Maintaining a Stable Economy

724 words - 3 pages As stable economy is one which has low rates on inflation and unemployment and a steady rate of economic growth along with a current account stability. Fiscal policy involves the use of government spending and tax receipts to influence the level and pattern of economic activity, whilst monetary policy uses interest rates to achieve the same. Fiscal and monetary policy can be used to influence short term Aggregate Demand with the aim of

I Everyone, For This Week, I Want You To Read And Respond To Another Case Study. Read The Case Study Measuring Teacher Leadership. This Study Can Be Found Under The Materials Tab For Week Four. Answer...

1196 words - 5 pages supplies snacks to the Unites States. The organization has expanded its operation to several places in the world trying to overcome the barriers of cultural and ethical differences. The organization expansion aims at accessing cheap labor from other countries and enlarging the market hence increased profitability. The company has a continued expansion in the line of its products so that it can satisfy the needs of the customers globally (Adamy, 2009

Take A Look Back To Your Life Since Your Childhood, And Write Out Your Experiences About How Hard It Is For Your Parents To Bring You Up

622 words - 3 pages . Don't just play when you feel you can" A 13 years old boy takes long time to know how psycho his father was when he want his son to have a close girl friend. When he finds out, the chance has lost. A 14 years old son knows that men can cry when he sees his father crying, but why his father cry is the thing he keeps in his mind secretly. A every ages boy can know he is everything to his father when he see his father proud of

3 secrets to living a life that you love and will never lose

704 words - 3 pages lives as we could lose them "If you cling to your life, you will lose it, if you let your life go, you will save it. " Luke 17:33 That translation has at times been misunderstood. There is a whole new way to love your life when you are living in your heart and not attached to any outcomes. Then and in that place, can you more purely love as you have no fear of losing and have only giving and serving in mind, heart and soul. Here are 3 secrets to

3 Different Life Styles You Choose Yours

1136 words - 5 pages different type to understand why one would do things to their car. Because one aspect might help one car but would hinder another, so I’ll explain the 3 main styles within Orlando, FL. So you can have a better understanding of why certain thing are done to their cars. Racing is the most dangerous one out of all 3 styles. It has its ups and downs, you could win money, and parts that could help your car get faster. Racing is like gambling you don’t know

Young Women Can Look to a Better Quality of Life Than Before. Do You Agree?

1312 words - 6 pages Young women can look forward to a better quality of life than before. Do you agree? Introduction: Legally young women are equal to men and have similar right. In some modern society, women's plight have improve through years but in patriarchal society, men still keep this traditional image of women. Young women can look forward to a better quality of life than before: Women in modern society: Nowadays women play an important role in

Describe How the Principles of Collaboration and Autonomy Relate to the Principles of Working in Partnership with Women. Then Critically Analyse How Midwives Apply These Principles to Provide...

1745 words - 7 pages The ANMC Competency Standards for the Midwife (2008) value woman-centred midwifery practice and state that midwives must work in partnership with women and their families. Using the available evidence, describe how the principles of collaboration and autonomy relate to the principles of working in partnership with women. Then critically analyse how midwives apply these principles to provide woman-centred midwifery practice. As stated by

Religious Beliefs Help You To Reach Your Potential

794 words - 4 pages . for my brothers and sisters in Christ, I urge you to find a church, and actively seek after God. It is easy to pretend and go through the motions because as far as we know, humans cannot read minds. most will not see anything wrong, and even the few that may see will in many cases not be close enough to actually do anything about it. so take a friend's advice now when I say God is the greatest thing that can ever happen to your life. Please don't

Global Warming and What You Can Do to Help

5755 words - 24 pages wildlife, including birds, reptiles, mammals, fish and sea life. Increased rates of extinction are expected. Agricultural crops could be affected in a variety of ways due to changes in rainfall and temperatures. Farming and ranching will require adaptation to new crops or new agricultural practices in the face of climate change. What each one of us can do to help prevent global warming. Plant native trees around your homes and businesses

Give a Life to Your Friend, It's Free!

897 words - 4 pages 6 Assumptions of the Andragogical Model To complete this assignment, you will need to fill in the following boxes: 1. In the first box you will identify one of the 6 Assumptions of the Andragogical Model 2. In the next box you will provide a description of the Assumption you identified. 3. In the last box you will discuss your perspective on how this Assumption differs from the Pedagogical Model. 4. Repeat steps until

Rehabilitated Drug Addicts Can Return to Normal Life

997 words - 4 pages Author’s name Instructor’s name Course Title Date Outline 1. Introduction 2. Body * The rehabilitation program being short * Lack of a transition plan in place * Effect of family or peers * Lack of willingness by the individual * Presence of an undiagnosed disorder * Lack of follow-up 3. Conclusion Rehabilitated Drug Addicts Can Return to Normal Social Life. Drug and substance abuse and addiction is a colossal issue

Related Essays

Can You Be Friends With Your Boss?

914 words - 4 pages Can you be friends with your boss? Introduction: This journal is written by Karen Dillon, a former editor of Harvard Business Review. In this journal the author states the perks and the fallouts of being friends with one’s boss. Here, Karen have shared her views about how one should identify whether friendship with one’s boss is a good thing or not depending on five factors. To justify her views, she have included the thoughts, sayings and

Can You Say What Your Strategy Is?

4996 words - 20 pages have the same values. They might even share a vision: an indeterminate future goal such as being the “recognized leader in the insurance field.” However, it is unlikely that even two companies in the same business will have the same strategic objective. Indeed, if your firm’s strategy can be applied to any other firm, you don’t have a very good one. It is always easy to claim that maximizing shareholder value is the company’s objective

Why Can It Be Difficult To Decide Whether Or Not A Person Is A Carer And Does It Matter? Base Your Answer On The Case Of Someone You Know

820 words - 4 pages Name: Asha Renah 23 February 2011 Part A: Essay Title: Why can it be difficult to decide whether or not a person is a carer, and does it matter? Base your answer on the case of someone you know. In this short piece of writing I will talk about the reason why it’s a great significance to be able to say who is and who isn’t a carer. The value of being recognised for the work being done helps lift the feeling of isolation and

Accounting Principles Apply To Business (Case Study)

1729 words - 7 pages equation, so that we can find out the net assets by total assets minus the total liabilities,it is also called Owner's equity or shareholder's equity for a company. 3. Does Hallenstein Glasson have any retain earnings or reserves? Retained earnings are important for businesses since this money is used to fund growth and buy fixed assets. Dividing the investment by the value of the company will give the percentage of ownership shares the investor