Macroeconomics

macroeconomics

Ab204-02

January 23, 2013

One concept that relates to Macroeconomics is supply and demand let’s say more and more people want to eat salads so this will call for more lettuce and farmers plant so many acres of lettuce a year since this is a seasonal product. So what happens is that the price of the box of lettuce gets to be thirty-five dollars but since the need is there everybody makes money.

But what happens when they get to the middle of lettuce season and there is too much lettuce that makes the price drop and the product ends up being a loss because everyone bought so much that they had to stop buying so much and the demand dropped. (Smith, 2011)

Next we have the concept of costs and benefits which makes up a large part of economics that have to do with the decisions one makes every day. Because people make the best choices that are good for their family and will always try to buy the best with the least money possible.

Then we have the Incentives, Incentives make the world go round, and sometimes go wrong. If you are a parent, a boss, a teacher or anyone with the responsibility of oversight, and things are going horribly awry, the chances are very good that your incentives are out of alignment with what you want to achieve. (Smith, 2011)

Have you ever went to the store and you see that if you buy a 44oz fountain drink you get a pack of orbit gum that is an incentive. But what happens when the incentive goes wrong for the business giving them, even these incentives can turn disastrous if the criteria for the incentives falls out of alignment with the original goal. (Smith, 2011)

These concepts aren't powerful laws that lead the action in to living and making decisions in certain patterns. These patterns come from hundreds, thousands, millions and billions of peoples making choices with the information that is given to them. Knowing these concepts won’t help you change the world but it will give you another way to look at it and help...