How People Make Economic Decisions

When we make decisions we need to be aware of the risks we are taking. The risks that are involved sometimes make our decision making hard to do. We need to keep in mind that we should never risk more than we can afford to give. Never risk more than we have, and never risk more than you can get back in return. Always follow you intuition.

When we go out to buy a car we make a decision. We look at several cars to see which one we like. We compare the costs, necessity, and the overall principle of the vehicle. Then we look at the marginal benefits and the marginal cost of the vehicle.

If two of the vehicles that we have decided on are different in price we look at what each of them have to offer to make us decide that we might want one over the other one. If both vehicles are about the same price then we would still look for the one that has the most things that it can offer for the money.

I would look at the in the cost in the two first to see if there was a difference. To me that is the biggest marginal cost. Then I would look at what each vehicle had to offer in the package. Depending on what each had to offer would depend on the one I would choose.

There would be no incentives other than lower the price or adding to the package of things that would make me changes my mind. If one is a little out of my price range and they add a DVD player or six disc cd changer I might consider picking that one over the other. The incentive would have to be a really big one for me to go with one out of my price range.