Time to rewind back to Economics 101. The beautiful topic of Economics is based on the principal of scarcity: we have a limited amount of time and resources available to us and must make choices of how to allocate what we DO have. In college, this means balancing the 3 S’s: Sleep, Studying and Socializing. Take a look at the following three principles and think about how you can apply them to your own life.
Opportunity Cost
This balancing act presents an opportunity cost: what you need to give up to attain what you2384185522_71ae7b4334_m want. For example, you can choose to study for an exam or go party with friends. If you choose to study, your opportunity cost is partying with friends. Opportunity costs do not always have a
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From there you can determine your values and use the principal of opportunity cost to make your decision.
The Law of Diminishing Returns
1933599909_d5dde5519e_mThe law of diminishing returns states that if one factor of production is increased while the others remain constant, the overall returns will relatively decrease after a certain point. “For example, if more and more laborers are added to harvest a wheat field, at some point each additional laborer will add relatively less output than his predecessor did, simply because he has less and less of the fixed amount of land to work with.” (http://www.encyclopedia.com/doc/1E1-diminish.html)
Here are some real life examples that might make more sense:
-Eating your 4th hot dog brings you less satisfaction than your first or second did.
-A drug addict needs more and more of a drug to feel the same pleasure he did from his first high to get the same effect.
-An extra hour of studying at 2am is less productive than your 1st hour of studying at 9pm was.
There are mathematic ways of calculating the point at which your action has less of an effect. The truth
Nowadays individuals are always looking for a new drug that will give them 10 times more the effect they get on a daily. Therefore, some will look for a new vendor or they will ask current vendor’s for a stronger drug with an even stronger effect. Nevertheless this becomes a dangerous situation because they are no longer in control of their clear mindset as for someone that is not addicted to the feeling of being high.
Because the first high is so pleasurable, many continue taking the drug in search of the first high they experienced. They try taking larger and larger doses to recapture a high that can never be obtained again.
Unfortunately, most college students don’t apply the four core principles of economics when they decide to skip class. Typically, students skip class to stay in their room to watch Netflix or endlessly scroll through Instagram without much thought or consideration. If more college students started using the four core principles of economics,
the brain, flooding it with the neurotransmitter dopamine. This produces euphoria, and the heightened pleasure can be so compelling that the brain wants that feeling back again and again. Unfortunately, with repeated use of a drug, the brain becomes accustomed to the dopamine surges by producing less of it. So the user has to take more of the drug to feel the same pleasure — the phenomenon known as tolerance.
Opportunity cost, a choice that is the value of the next best alterternative given up when a choice is made, is a solid decision making technique because the choices being made can be equally compared for greater satisfaction in a decision. Opportunity cost can be used in a multitude of different situations where choices must be made. For example, a teenage girl wants to see the latest romantic comedy at the cinema with her friends, but the teenage girl has an important chemistry test the next day. By using opportunity cost the teenage girl has the option of thinking about what her best alternatives are. If the teenage girl goes to see the romantic comedy she will get to hang out with her friends and see the latest romantic comedy, but is the
Act Utilitarianism is the morally right act, for any situation, is that act which produce the greatest overall utility in its consequences. (“Ethical Choices” 2011). Act utilitarians believe that we need to understand what is right and what is wrong in order for us to make ethical decisions. In doing so, it tells us what we ought to do to promote the greatest amount of utility. In this view, we are focused on the scope, duration, intensity and probability of our actions. The scope tells us how many people are affected by certain actions; The duration tells us the amount of time that the effects our actions last; Intensity tells us how differently people are affected by our actions in that no two situation affect people the same; and, The probability tells us that we can’t predict our futures, but we can estimate how are actions affect others. In act utilitarianism we
Which costs would you take into account in making your decision, fixed costs, variable costs or both? Make sure to explain your analysis in the decision that you have to
Once a person starts to abuse drugs or alcohol, their body becomes addicted to the euphoria they experience, leaving them craving more. The more a person craves a substance, the more they are willing to do
The addictive aspect of the drug comes when the “psychological need for drugs that surpasses the user’s ability to control the use
And some substances are more addictive than others: Drugs like crack or heroin are so addictive that they might only be used once or twice before the user loses control.
3. A person who fulfills a wants only to want more may see whatever that is as an endless item. In the example given, someone who is addicted to drugs might require more of the drug to experience the same feeling. Humans are selfish in nature so when the want is filled the brain is programmed to want more and immediately we seek out ways to fulfill that again and again. Working for Verizon I see this all the time, the new Iphone 6 launches and people go out and buy it for ridiculous prices, enjoy it for 2 months and then they demand a new better, faster, Iphone again.
Per say that a person maximizes the utility of each specific action that they do, then they have maximized the overall utility that is within their power. If a person occasionally choses options that produce less positive results than other solutions, the total positivity of their actions would be less than the amount of positive than could have been created. This reason is what allows act utilitarians to argue that humans should apply the utilitarian principle to specific acts, not to classes of similar actions.
* Law of diminishing marginal productivity states as more of a variable input is added to an existing fixed input, after some point the additional output from the additional input will fall.
Trade makes Everyone Better – by trading with one another we can all win or come out for the better. That’s because, not everyone can make something as good or at the same cost as someone else, for the simple reason that we do not have access to the same amount resources or skills to produce something. (Mankiw, 2013) A town in the mountains would have a difficult time suppling the same amount or quality of fish that a town located on a lake or the coast of an ocean. Yet the same town has access to a better supply of granite from its quarries or lumber from its forests than the town better equipped for fishing.
16) Drug users need to take increasing amounts of the drug in order to get the same high because when so much dopamine is produced, the brain tries to reduce the drug’s effect by switching off some of the dopamine receptors, which is called “down-regulation”. As these receptors shut down, larger amounts of the drug are required to produce a high.