Saturday, February 27, 2010
My microeconomics text book cost me about 253 burritos from Taco Bell
I found this weeks discussion on relative prices both interesting and releaving. I found it interesting because I actually view the price of a prospective purchase in the form of hw much of something else I could buy with the same money. I was releaved to learn about relative prices, because for a while I sort of thought that I was the only one who viewed the price of a new TV in terms of cheeseburgers and tacos. As far as I can tell, the theory surronding relative prices seems to be pretty sound, that is if the price of one good goes down people buy more valuable things. A point that we touched on in class that didn't occur to me before for some reason, is that if you're budget consits of $1 tacos and $2 comic books and the price of tacos goes down enough so that you end up with $2 extra then normal, you might be inclined to spend it on antother comic book. I had always been confined to the thinking of spending a set amount of money on one particular good regardless of price, so that if the price on tacos went down, I'd simply end up with a bunch of tacos. I think I will deffinitly use this concept more consciencly and efficiently now that Ive learned a bit more about it. So the next time prices drop on something I was planning on buying multiples of, I'll stop and check my other options before I simply just buy more of the *discounted* good then what I had originaly intended.
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Yes, that is a helpful concept. For example, if the price of gas dropped, you wouldn't buy more gas than you need just because it was less expensive, so why not apply that concept to your other purchases too?
ReplyDeleteWhen I was younger and wanted to buy something I did not necessarily need my mother would always says to me "You could buy something you actually need with that money." Now that I am older, I always way my pros and cons with each purchase I make. If something is discounted, I am not going to buy another same exact product when I can use that money towards a different product that I need more.
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