Use a Principle, or Principles, Discussed in the Course to Pose and Answer an Interesting Question About Some Pattern of Events or Behaviour That You Personally Have Observed.

Essay 1 : Use a principle, or principles, discussed in the course to pose and answer an interesting question about some pattern of events or behaviour that you personally have observed.

Why some people want to buy so expansive watches whereas you can find one for five pounds which works very well. Usually, the function of a watch is giving the time. Thousands kinds of watches can give the time. Watches you find on internet, starts from five pounds while you can find luxury watches like Rolex or Breguet which is approximately five thousand pounds, to finish with collection watches as Patek Philippe is (the more expansive is ten millions dollars).

How can we explain why someone chooses a luxury watch than a cheap one? It is not rational. You can buy one hundred cheap watches for the same price as a luxury one.

But at first it can be useful to explain how a watch can be so expansive and others very cheap

In the 19th century, Adam Smith and David Ricardo explained the value of good saying that it depends on the kind of the good. In the one hand, if it is a scarce good, the value depends on the scarcity of that good. That is what justified the price of a collection watches. In the other hand, if it is a reproducible good , the value of a good depends on the labor used to do it.

The function of watch is giving the time. The difference between a luxury watch and a cheap one, is that a luxury is usually Swiss hand-made, with a very complicated mechanism and an expansive metal whereas a cheap one is made in a factory country (Taiwan or China), the system is usually quartz, and plastic is often used. But the function is the same. Your watch give you the time.

Now, we understand the differences between these prices. Now we have to explain how a consumer chooses an expansive watch than a cheaper.

According to the microeconomics theory, a common watch can be considered as a normal good. But a luxury watch has to be considered as a superior good. These two goods...