Scenario: Imagine having an informal conversation with your best friend a year from now. She may...

Scenario:
Imagine having an informal conversation with your best friend a year from now. She may want to take an economics course at her community college.

She seems both nervous and excited, and has several questions for you:

In plain language, what is the one big economic concept/idea that you remember most clearly?
Why did this particular concept/idea resonate with you?
Has your perspective on this concept/idea changed or stayed the same? How?
How have you experienced this concept/idea in your own life so far?
How do you think this concept/idea will influence you moving forward?

Expert Solution

In plain language one economic concept that can be remembered is Law of Demand. This means ceteris paribus, an increase in price of a commodity leads to a decline in quantity demanded and vice versa.

This particular concept is very common and can be easily applied in everyday life. For example, i have a habit consuming two packets of chips every month. However, recently the price of chips doubled. Due to this I reduced my chips consumption from 2 packets to just 1 packet every month. This is law of demand which I applied in my life. When price of chips doubled, I reduced its consumption. Since this concept can be applied in our everyday life, hence, it resonates with me.

My perspective on this has stayed the same. There are many reasons to this. First of all, it is very easy to understand and very easy to explain to anyone. Second, it can be easily applied in everyday life and is very valid and is easy to remember.

Yes, I have applied (Student please note that the chips example I have mentioned can be used here)

This concept can immensely help me in moving forward. It can help in understanding the importance of price rise or price fall of a commodity. If there is a necessity like medicines which cannot be avoided by the consumer, then a rise in its price will not impact the demand. However, if the commodity is nit a necessity like the chips example given above, then a rise in its price will lead to a decline in its demad and a fall in price will lead to a rise in demand, ceteris paribus.

Rahul Sunny answered 2 years ago

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