I’ve come to conclude that Economics is the study of how people, businesses or institutions choose to allocate resources. Resources are not always dollars and cents: time, skill and land are all resources. People make economic decisions with the intention of maximizing their return. For example, me being a college student might allocate my time and substantial amounts of money to earn a degree. In return, that degree will ideally yield me numerous job opportunities and an increased income. That’s the “American Dream” way of thinking, but what I’ve come to realize in class, is that there are many people out there who has spent six to seven years out of there lives going and achieving a Master’s Degree, but still are unemployed and can’t provide for their families, let alone themselves. Just typing those words, put a lot of fear into my heart. Why go to college and take out loans and invest my own money into something that will have no outcome? Which brings me into my next segment, Life Decisions.
Some of the most important life decisions are made using economic reasoning. I myself will be going under multitudes of these such as which college I’ll attend once I get the acceptance letters, to have children, whom I marry and where I will live are just a few of these. Before deciding on any of these events, a person performs what economists call a "cost-benefit analysis" or what Ms. Franchi likes to call in economics class, an “Opportunity Cost.” Simply put, the pros weighed against the cons. If one choice provides more "utility"or personal satisfaction than another choice, a decision is made.
Economics permeates into everyone's daily life in the area of purchasing decisions. How much money you have in your bank account dictates what types of purchases you make. Economics groups purchasing choices into three groups: luxury goods, normal goods and inferior goods. I say inferior goods because when income