When I embarked on this course several weeks ago, I was entirely unaware of the realm of Macroeconomics and held no enthusiasm for delving into the subject matter. As I delved into the initial chapter of the book, I found myself thinking, "This semester is going to be quite arduous." However, as I progressed through each chapter, completed the assignments in Mind Tap, engaged in discussions on the board, and responded to questions, I discovered a growing interest and a profound comprehension of the Ten Principles of Economics presented in Chapter One. To my astonishment, I came to realize that economics is deeply interconnected with our daily lives.
Macroeconomics and Its Real-World Application
Economics, as a social science, is concerned with the production, distribution, and consumption of goods and services. It takes on the form of a social science due to its utilization of scientific methods to construct theories that elucidate the behavior of individuals, groups, and organizations.
Following the completion of this macroeconomics course, it became evident that macroeconomic issues, such as inflation and unemployment, impact everyone in some manner. Personally, I experienced one of these issues when the company I was working part-time for, Papa Gino's, filed for bankruptcy, leading to abrupt lay-offs, including myself. In life, we are sometimes confronted with unexpected challenges, but we must persevere, picking up the pieces and moving forward. In this paper, I will apply economics to my everyday life, drawing from personal experiences and situations. Topics such as positive/normative statements and how people respond to incentives will be explored. Allow me to commence by demonstrating how real-world economics can be applied through two different types of statements. Positive statements present verifiable facts, for instance, "Government-provided healthcare increases public expenditures." Conversely, normative statements express subjective judgments on how things should be.
This reality resonates deeply with me. On various occasions, I have made normative statements, particularly when discussing healthcare insurance with my neighbor. He shared his struggle to afford medication, as his employer did not provide healthcare coverage, leaving him to pay exorbitant costs. In my view, healthcare should be accessible to all, especially those who cannot afford it independently. No individual should go without necessary treatment or medication. Healthcare ought to be either provided by the government or made more affordable for those with limited means.
Throughout this semester, I engaged in several articles and discussions on Economics, realizing how essential these concepts are in our everyday lives. Reflecting on some of the economic challenges we face, I recognized instances from my own experiences or potential future encounters.
Consider how people respond to incentives: Would individuals wear seat belts if there were no consequences for not doing so? Would someone persist in daily workouts without experiencing any physical changes? What if someone were asked to work five days a week without receiving a paycheck? In most cases, our actions are guided by incentives. The most prominent incentive in economics is the price. It serves as a signal for both suppliers to produce and consumers to buy. Sales, for instance, entice customers to change their behavior and make a purchase.
Conversely, an increased price incentivizes producers to increase their output. If suppliers believe they can sell their products at a higher price, they are more likely to produce more. Therefore, price influences both consumption and production.
Often, we take for granted the many blessings we possess without contemplating what life would be like without them. Consider the example of water, a necessity for most households. Even if the water company were to raise the cost of water by a significant amount, people would still feel compelled to pay for the service.
Similarly, cigarettes can be considered an inelastic good. If the cigarette tax were to increase, the demand would remain relatively unchanged, as many smokers are addicted and have limited alternatives. Therefore, changes in price have only a minor effect on demand.
The degree to which a demand or supply curve reacts to price changes is known as elasticity. Elasticity varies among products, with some being more essential to consumers. Necessities are less sensitive to price fluctuations, and people are likely to continue purchasing them despite significant price increases.
In my opinion, this economics course has prepared me to enter the business world with greater confidence and knowledge. It has introduced me to essential concepts and topics that have influenced both my personal and professional development. The course, though challenging at times, was designed effectively with the aid of Mind Tap, making the learning process enjoyable and illuminating. It pushed me to new heights, for which I am deeply appreciative, and I now have a better understanding of economics.
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