Microeconomic of my own life Essay Example | Topics and Well Written Essays - 1000 words

Microeconomic of my own life - Essay Example Having learnt various principles and theories in microeconomics, the objective of this paper is to relate my life experiences to some of these microeconomic aspects. Microeconomics has made me appreciate choice as a comparison of alternatives. The forgone opportunities for the next benefit alternatives would be referred to as opportunity cost as noted by Boyes and Melvin (23). Opportunity costs refer to the highly valued alternatives which have to be forgone when making a choice. Thus, in my case, the freedom to watch movies, eat the food of my choice and play with my pet would be considered as the opportunity cost as I had to forgo this for the sake of enrolling in a boarding school. The next benefit alternative would thus be joining a boarding school which was meant to make me excel academically. Despite the academic benefit that I was to realize by being in a boarding school, I found other benefits that I would not have found had I remained in my previous learning institution. My father worked in a pen manufacturing firm and hence gave me the best ball-pens to use for my writing. I made many friends in school because of these pens as many students would borrow my pens. At first, I was generous enough to give them out. Within a short period of time, students would demand to know where the pens were sourced from. Actually, the pens were available in the stores but at a high cost and thus stocked less. Remember, Boyes and Melvin (23) observe that costly goods do not elicit the urge to buy from consumers. A majority of pen users would prefer the less costly pen varieties as long as these pens served the intended purpose, quality aside. Since my father supplied these pens to me free of charge and in unlimited quantities, I started selling them to those students who demanded for it at a slightly lower cost than they fetched in the retail stores. The attractive qualities of the pens including swift gliding while writing and availability in diverse colors made the p ens popular. Word went round the school on the attributes of the pen which made the demand increase. Students drawn from various classes would look for me to supply them with these pens. Realizing the increased demand for the pens, I raised the selling price for each pen. This trend follows the microeconomic law of supply which according to Boyes and Melvin (52) dictates an increase in supply with increase in the prices of specific goods or services and a decrease in supply with a fall in price. Assuming the role of a supplier, as the students were willing to spend more to have the pens, I kept increasing the cost. Since I could not wholly satisfy the demand for these pens, I could not determine the effect of price increase on demand which according to the law of demand dictates that with such price increases, there tends to be a decrease in demand. But the trend did not last for long as I had to be careful neither to sell the pens at the cost in the stores nor to sell them at a cos t deemed exorbitant to the students. It reached a point where I could clearly see the impact of price increment on the demand for the pens from the students. As if abiding by the law of demand, the students gradually reduced their demand until I had a number of students whose demand for the pens I could satisfy at the indicated cost. In essence, this was the equilibrium according to