Personal Economic Decisions - 1455 Words

Running Head: Personal Economic Decisions Personal Economic Decisions How People Make Economic Decisions People make economic decisions on a daily basis, from choosing to go to the grocery store and cook dinner or going out to eat. While in the general scheme of things this is a relatively small decision to make it still can have impact on the economy. Yet a decision for a family to have a child is more of a major decision and has far more of an impact on the economy then a dinner decision. There are four basic principles to economic decision making and in the following I will list and explain these. I will also provide and an example of a decision that I have made in my personal experiences and what impact that has had or could have had†¦show more content†¦It is a definite tie in to the previous principle as most consumers are looking to get the most for the least. Restaurants are starting to use promotions of smaller portions for smaller prices in order to compete with the growing money saving tight budgeted crowd. Mankiw (2007) provides a great example of this by stating à ¢â‚¬Å"For example, when the price of an apple rises, people decide to eat more pears and fewer apples because the cost of buying an apple is higher. At the same time, apple orchards decide to hire more workers and harvest more apples because the benefit of selling an apple is also higher. As we will see, the effect of a good’s price on the behavior of buyers and sellers in a market—in this case, the market for apples—is crucial for understanding how the economy allocates scarce resources.† (p. 7) Personal Economic Decision When I made the decision recently to purchase a new car, I was forced to evaluate the cost versus the benefits in order to make the most economically sound decision I could. My current car at the time was costing a significant amount in repairs and due to the age of the car was not the most gas efficient car that I could have. The warranty of the car was just about up and it seemed that most of the issues I was having with the car at the time were not covered under warranty. The major plus of the car is that I did own the title, there was no car payment needed. The biggest cost comparison was the cost I was having with my currentShow MoreRelatedThe World Is Becoming More Complex Day By Day Essay1128 Words   |  5 Pagescomplex day by day.so when we take any decision it must influences other factors. We take different policy or decision everyday by considering many sites or situation and which has a specific goal or vision. 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