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What role does economics play in your personal and organizations decisions

Analyzing and Understanding Human Behavior

On the first day in my classes, I will give students lots of examples of how the concepts we'll be covering are related to them and important in the working world. For example, there's opportunity costs.

What role does economics play in your personal and organizations decisions?

It's an economic concept that also comes into play in accounting, finance, marketing, and management. Because decisions have consequences. And that's what opportunity cost is all about! In other words, every time a decision is made, there are benefits and there are "costs," meaning sacrifices.

  • First, we develop conceptual models of behavior to predict responses to changes in policy and market conditions;
  • For most people, the answer would be very little;
  • Families, small business owners and others weigh the benefits and costs of decisions related to purchases, investments, sales and other expenditures before making a decision;
  • And how much they'll cost you;
  • For individuals, value maximization decisions may include choosing between name-brand products and generic products, and choosing between small or bulk sizes.

In other words, pros and cons. Opportunity cost tells you what those cons are.

  • Prospective majors Of course economics majors can also take the courses described above as part of their plan of study;
  • These courses require only one semester of introductory microeconomics as a prerequisite and are well-suited for non-majors who seek to supplement their major with related courses of study or simply have interest in these areas;
  • When paychecks and fixed incomes keep up with inflation, moderate inflation is seen as an indicator of economic growth.

And how much they'll cost you. So if you were to decide to take an extra class, one opportunity cost would be how much free time you'll lose as a result. In other words, instead of being in that class, you could be out and about enjoying yourself by shopping, sleeping, being with friends and family, etc.

Basic Factors of Economic Decision Making

And if you're a working student, then an opportunity cost of your taking that extra class may be you're missing out on making overtime. Because you'll be in school and devoting more time to your classes. And that'll leave you with less time to spend working and making money. This is just one example using an economic concept that comes up very early on, maybe even day one in an introductory micro class. And fyi, anybody who's learned about the time value of money or the risk-reward tradeoff has really learned about opportunity cost.

What role does economics play in one's personal life?

Time value of money and the risk-reward tradeoff are two economic concepts that have been adopted for use in accounting and finance. Two other classes I've taught over the years.

  • One way to understand this question is to say that it is asking about our conscious choices;
  • And if you're a working student, then an opportunity cost of your taking that extra class may be you're missing out on making overtime;
  • Each model relies on a number of assumptions, or basic factors that are present in all decision situations.

And ones where I have schooling or a degre in. This is exactly why having a background in econ, even an introductory one, is something that's beneficial to you.

What role does economics play in my personal and organizations decision making?

And that applies to your personal life, work and careers, and schooling in other subjects. Econ is a very broad-based subject that has uses in practically everything.

How does economics study human action and behavior?

I teach micro and macroeconomics on the college level. And have my degree in it too. I've also taught subjects from virtually A to Z, including: