Economics Discussion

Economics Discussion

I moved from a small town to the city a few months ago, and I realized the living cost was a little higher, and I needed some adjustments. I had a hobby and a little obsession with works of art and crafts that I used to design during my free time. I started selling some of my crafts on online platforms but still faced significant financial constraints, mainly due to a high lease rate of my residential house in the city. A crafts marketer contacted me on a mobile crafts show they were, which would make my products meet willing buyers. The deal was good since the sales occurred on weekends, but I still needed more cash to move my products across different locations in the state. My options were to cut off the deal or move to a cheaper house and raise funds for running my part-time business. After a lot of considerations and analysis, I moved to a more affordable house and managed to raise enough funds to purchase a van for transportation and increased production.

Moving from one area of residence to another required some form of adjustment, and I sought to establish that through investment in my hobby. I, however, failed to develop an economic analysis in my earlier decision to sell my products on an online platform. The financial constraints were growing, and ensuring the sustainability of both my new business venture and livelihood in the city; I had to make some economic considerations. I needed to invest in my business idea, but the startup cost wasn’t forthcoming. I considered cutting some of my household expenses, in this case, my rent fees, to raise the amount required to kick off my business venture. Through a reduction in my monthly expenditure, I saved some money, and within three months, I was able to purchase a new van and boosted my production levels. Meeting willing consumers of the product also raised the demands.

The two concepts of Chapters 1 and 2 that apply to this economic decision are 1.3 and 2.1. The element of rational self-interest occurs in my ability to examine individual interests and taking up economic actions and opportunities to fulfill them. Self-motivation also encompasses parts of the second chapter on consumer behavior. In my position, I needed to make financial amends to meet another economic interest in an investment. Every individual faces the elements of scarcity to the nature of human wants. Moving to a new city, my financial state didn’t fully satisfy my human wants. The realization of this factor of scarcity presented an analysis opportunity to evaluate choices and opportunity costs to meet for meeting the choice. An expensive house was the opportunity cost of raising my choice, startup costs for my new business venture..

Rational self-interest in economic analysis develops as a behavioral action in making economic decisions as established in 1.3. In my case, the element of self-interest refers to an economic activity I was interested in pursuing. The component of self-motivation lies on the economic cost of pursuing my interest, which is a smaller house to raise the investment cost. In the scarcity approach on 2.1, my financial constraints imply the nature of scarcity in meeting the human wants. The decision process establishes investment as a choice and a big house as an opportunity cost.

In retrospect, I believe an economist would have made the same decision across all the concepts established in the course. In section 2.4, we analyze the concept of trade-off between consumer goods and capital goods. Purchasing a business vehicle is a “capital good” decision achieved from giving up a “consumption good.” In this approach, an economist’s decision-making process will establish a value-based approach that leads to economic growth on a microeconomic level.