Microeconomics in Daily Life
December 12, 2011
Microeconomics In My Daily Life
Throughout my life, I have always been reading and hearing about economic issues and concepts, but I never thought about the impacts of economic models on my personal life. Before learning about microeconomic concepts, I always thought that a course in the field of Economics, would teach me theories that only apply to the economy of a nation as a whole and not to an individual’s life. However, there were a lot of concepts throughout this course that I found relative to my personal life. Among all the concepts that I have learned in the Microeconomics course, “Opportunity Cost”, “Sunk Cost”, and “Supply and Demand” have the most impact on my daily life.
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Another situation that I consider opportunity cost in making decision is when I choose to pay 17 Dollars membership fee for Netflix instead of renting the movies. Although I may not watch more than 1 or 2 movies per month and I may be over paying for the fees, I would rather continue my Netflix membership. The reason behind this decision is that the opportunity cost of renting the movies from store is higher than paying the membership fee because I prefer not to spend too much time in traffic and also pay extra money for the gas in order to rent and return from the movie store. “Sunk Cost and Choice” is another relative concept of Microeconomics to my daily life. At Costco, when I am finished shopping and wheeling my cart toward the checkout counters, I always pick the shortest line to join. However, sometimes that short line barely moves for minutes. At that time I look around to find another short line or find a cashier who has opened a new line. Without thinking of the time that I have already spent in the first line I decide to go to the new line or another short line, because I look at the time that I spent in the first line as a sunk cost that is gone and can not be recovered, regardless of what I do next.
Although sunk cost should not affect our decision making but knowing the concept sometimes helped me to make the most of a bad situation. I remember that I chose to pay 200 Dollars to fix