Economics: The answers to everyday enigmas

Economics is everywhere, not only in banks or classrooms. it influences greatly to what we do and what we see, from your home to the streets. Economics explains some of the life's most intriguing questions. For example, in some countries, there are drive-up cash points so people do not have to get off their cars in order to withdraw some extra cash. But why do the keypad buttons on these machines have braille dots on them? The visitor of these machines are almost always drivers, and of course, none of whom are blind. The thing is, the cash point manufacturers have to make keypads with Braille dots for their walk-up machines anyway. So it is cheaper to make all machines the same way. Since the Braille dots caused no trouble for the sighted or the non-sighted users, the extra expense do not justify.

In economics, we stufy the conflickt between the limited resources int he world, and the unlimited wants and needs people have. Which then of course, due to the conflict, result in scarcity. In economics term, scarcity refers to the inefficient supply of a certain product to satisfy the human wants and needs. To put this in an example of our everyday life, we can relate this concept to our number one everyday necessity, food. Some fruits and vegetables are scare in markets sometimes because those fruits or vegetables grow only at certain times of the year. Because the supple of fruits and vegetable is lower, there is a better chance that those fruits and vegetables will be scarce, or not always avaliable. You may find that the market has no strawberries at all. Why? Either no shipemtns of strawberries came in, or so few strawberries came in that by the time you got there, they were all gone.

Of course, when there's scarcity, we have to make choices. Following the example above, when strawberries are scarce, then we have to make a decision whether or not to travel to different places to get strawberries, or go without them. but when you can't find the strawberries, we can say that scarcity has forced you to go without strawberries. Choice is another important econimic concept. People have to make choices because they do not have infinate income. So with the limited money they have, they have to choose what they are going to use the money on. The choice is small if a person's financial income is small, compared to someone with a larger income, who has more choices.

This leads us to anoyher important concept in economics, oppotunity cost. Which is, defined as the next best alternative forgone. When we say doing something is an opportunity cost of another thing, it means that one has to give up something, a choice, to pursure another thing. A simple example would be the use of land. When a piece of land is used to build a shopping mall, the opportunity cost would be the other uses of the piece of land. The land could be used to build more houses or high rise buildings, which could then give people a place to live if the country is over-populated. But because a choice to pursue for a shopping centre is made, the land cannot be used to build houses.

Opportuanity cost is important simple because it helps us explain a host of interesting behavior patterns. for example, the widely remarked culture difference we notice in big cities like London and a smaller town in England. Why do residents in cities so rude and impatient, but residents of the small town so friendly and courteous? If you walked into both places and asked for directions in a small town, people would tend to stop and help you and guide you. On the other hand, people in the large cities wouldn't even bother making eye-contact with you. Why is this so? It is because places like London has a high wage rate and have a lot of things to do, therefore, the opportunity cost of people's time is very high. So perhaps this is the reason why people in the city are a little quicker to show their impatience.

Economics does not only help us into knowing the problems faced by the world, like scarcity. It also helps us to explain why certain things in the world happen, and why people choose certain things and act in dfferent behaviors. And these behaviors are shown in the link between scarcity, choice and opportunity cost.

-Nicholas Hui T.W 5 Z