Question

“It is better to pay regular price than to stand in a long line for a free item.” Discuss the statement using three (3) core principles of economics (with applicable examples) to support your views.

Answer 1

The thing is, you're doling out something: your time and a lot of it at times. That has a value that is likely to exceed your economic advantage by not paying for a particular good. Plus, some of the "free" stuff is actually just free to buy, meaning you end up shelling out some cash, anyway. (For example, at Dunkin Donuts, the donut is free only if you fork cash for a drink.)

It turns out that we gravitate towards the free one when confronted with countless decisions, regardless of its financial value. We often pay too much when we pay nothing. Most transactions have an upside and downside, but when something is free we forget the downside. Free provides us such an emotional charge that we perceive what is provided to us as being considerably more important than it really is.

For instance, candies from Hershey and truffles from Lindt. Under ordinary conditions, the products of the Hershey are already considerably cheaper than the goods of Lindt — and the latter also have an air of exclusivity or cachet. The Lindt product has a greater value by any measure. However, when asked to choose between a free Hershey product or a dramatically discounted Lindt candy, the vast majority of people will choose the free item, even if it was not objectively the best deal.

It misses the point of telling someone with their moment that they could do something else. The point is this event is just like Black Friday, one day of the year. So sometimes you sacrifice in one area to gain in the other in order to get what you want.

That's the choice for individuals to make. If someone wakes up early or camps out for a day or a week in front of a store, it doesn't imply they're unemployed, dumb, and lazy. They understand what is happening to them.