Economics

This is the first time that I have had the opportunity to be in an Economics class so coming into the semester I wasn’t really sure that I knew what Economics was. From the course material that we have covered thus far, and the material that we will continue to study the remainder of this semester, I have come to understand that Economics is part of our day to day lives. The book that we were assigned to read, The Undercover Economist, helped me to better understand the whole of Economics.

While reading this book it helped me to really think about where the money that my wife and I make really goes and to what extend we are being overcharged for certain items that we purchase. One of the main examples that Tim Harford used in The Undercover Economist is the one of coffee. He takes the reader through the entire process of what happens when we purchase a coffee. I liked the fact that he made you think about what it really would cost to make the coffee. He puts it into a perspective that is simple to understand and really makes you wonder what other things could be the same. He really went into detail of the whole process of making coffee and not only just the producing of the coffee itself, but the buildings that coffee shops are put into and the rents that are charged. It really gives you a perspective that isn’t always thought of in our daily lives. It made me understand why places like Starbucks are able to have buildings in such centralized locations. From the readings it all boils down to who is willing to pay the highest price because they know that the location is going to allow them to make profit. The examples used in the book are of big cities with metro’s and large squares.

Each day we make decisions. We decide whether or not to wake up, whether or not to go to school, whether or not to do our homework, etc. Each of these decisions is an economical decision. When we make these choices we are saying that the alternative is not of the same importance to us. For instance, where I work we are extremely slow at the moment. When my coworkers and I arrived at work on Monday we were given a choice. Since that we are so slow at this time we were given the opportunity to take any day this week off. Each year each employee is allotted a certain number of days off with pay and we were told that we could have any day this week off without pay and we would not be punished for doing so. It was very tempting to me to just say okay I don’t have to work the rest of this week. Yet, as I thought more about it I decided that working would be the best idea so that when my next paycheck came I would still be receiving some money. This was an economical decision.

Where are we willing to spend our money? Why are we willing to spend our money where we spend it? These are some of the questions that were addressed in this book. One of the major decisions we as humans make is where we spend our money. We spend our money on certain items because that money is worth whatever it is that we are purchasing for the price that it is at. I love Zero bars. I just love the white nougat chocolate and caramel. Theses candy bars are difficult to find. They aren’t as popular as snickers or Kit-Kat’s, but when I see one in the store I am willing to pay whatever the price is to enjoy it. If a Zero bar was 2 dollars I would still buy just one. If snickers were 2 dollars I would not be willing to pay that same price because it isn’t worth it to me.

One of the examples that are presented in the book was that of a line in a supermarket. “You can see the phenomenon at work at the supermarket checkout. Which line is the quickest? The simple answer is that it’s just not worth worrying about.” I like this idea, the idea that “it’s just not worth worrying about.” This is something that could happen each day because we are often at stores and I know that I have always looked to find the “fastest” line. The readings make you think about whether or not it is really worth your time to find this fast line because if everyone knew which line was fastest they would join it and it wouldn’t be the fastest line anymore. It really is as simple as that, if everyone knew which line would be fastest, it wouldn’t be the fastest line anymore because everyone would join it. It really doesn’t matter what line we choose to go to because you’ll get checked out in the slower lines and the time difference, if there is any, will be marginal.