StudentShare
Contact Us
Sign In / Sign Up for FREE
Search
Go to advanced search...
Free

Choices Are Everywhere:Why Can't We Just Have It All - Article Example

Cite this document
Summary
Article Review Name: Institution: Course: Tutor: Date: Wolla, S.A. (2013). “Choices Are Everywhere: Why Can’t We Just Have It All?”Page One Economics Newsletter. Wolla’s article, “Choices Are Everywhere: Why Can’t We Just Have It All?” explores the concepts of scarcity and opportunity cost…
Download full paper File format: .doc, available for editing
GRAB THE BEST PAPER94.4% of users find it useful
Choices Are Everywhere:Why Cant We Just Have It All
Read Text Preview

Extract of sample "Choices Are Everywhere:Why Can't We Just Have It All"

Article Review Wolla, S.A. . “Choices Are Everywhere: Why Can’t We Just Have It All?”Page One Economics Newsletter. Wolla’s article, “Choices Are Everywhere: Why Can’t We Just Have It All?” explores the concepts of scarcity and opportunity cost. Wolla examines a challenging issue on the best way to reduce government debt, which has been a heated debate in the recent times. According to him, wants surpass the available resources. Government expenditure is supported by current revenues obtained from taxation or borrowing.

Wolla argues that the fiscal cliff resulted from high debt level that emanated from wanting and purchasing more than what could be paid for. Dissecting to the article, debt reduction includes two difficult choices. The first choice involves reducing government expenditure on goods and services. However, this choice is surrounded by a difficult decision on which government spending to be reduced. The second choice of reducing government debt is through raising taxes. However, the question is who should pay more?

One choice could be preferred over the other or the two choices could be blended. Wolla argues that these choices also apply to household budgets. Whichever choice one makes, basic understanding of economic concepts of Scarcity and opportunity cost remains imperative. In an attempt to clarify the concepts of scarcity and opportunity cost with regard to personal and household spending, Wolla uses a $20 gift card. The $20 is the budget constraint for the individual who receive the gift card. According to Wolla, wants are unlimited while the resources to satisfy these wants are limited.

It is this situation of having limited resources and unlimited wants that he refers to as scarcity. According to the article, the $20 mark means that the card holder cannot have anything to spend more than the limit and thus, cannot purchase all that he or she wants. In Wolla’s own words, “the $20 limit means that you can’t have all the CDs, movies, or games you want; you must choose that one you want the most” (Wolla, 2013, p.1). According to Gwartney et al. (2011), scarcity necessitates choice.

An individual has to make a choice between two competing items depending on their level importance. For example, one could be faced with a choice of spending his last $30 on a movie or a new shirt. Because he cannot purchase both the movie and shirt, he has to make a choice between the two items. Wolla’s argument that deciding between recently released music CD from a band and a new movie involves a choice, involves opportunity cost, is quite to the point. Wolla defines opportunity cost as “the value of the next-best alternative when a decision is made” (Wolla 2013, p.1). This resonates with Lindeman’s argument that “opportunity cost is the economist’s way of saying that nothing is really free” (Lindeman, 2002, p. 26). Daily decisions contain the elements of scarcity, choice and opportunity cost.

For example, Charles is in dilemma whether to start a business or use the money for his college education. Going to college involves spending money in terms of paying school fees, which could be used to start the business. Therefore, the opportunity cost of going to college is not starting the business. Opportunity cost is the value of the forgone item or decision (McEachern 2013). The more one spends on an item, for example food, the less he spends on another (movies). Scarcity and choice involves trade-offs (Gwartney et al., 2011). Credit cards have been established to enable people to borrow beyond their expenditure limits.

However, as Wolla notes, credit cards have limits and translate to less future disposable income. Therefore, the more one uses credit cards, the lower income for spending he has for the future. Wolla further argues that the government faces similar tough choices that households face. The government has to satisfy collective wants of citizens through spending its revenues in public goods and services such as health care, social security and defense among others. However, the ability of the government to satisfy the collective wants of citizens is constrained by the amount of revenue mainly obtained from taxation of individuals and companies.

Similar to households, opportunity cost arises when the government chooses to satisfy one public want over the others (Wolla, 2013). Spending more revenue on defense would mean spending less on health care and vice versa. Just like households use credit to purchase beyond their budget constraint, the government can also borrows to finance its expenditure (Mishkin & Eakins, 2012). However, this increases government debts and diminishes the amount of government income available in the future for spending on goods and services.

Wolla concludes by saying that making good economic decisions entails deep understanding of the concept of scarcity and opportunity cost. Wolla’s article presents an important piece about crucial economic concepts, but fails to tell the readers how individuals make rational choices, which comes with scarcity of resources. Further, Wolla makes no inference to previous research on the same topic, which makes the ideas in his article more of mere individual opinions. It would be great if wolla backed up his claims with numerous researches to create some element of validity to the article.

Nonetheless, the article remains crucial for government officials, individual and households in making economic decisions. References Gwartney, J.D., Stroup, R.L., Sobel, R.S. & MacPherson, D.A. (2011). Macroeconomics: private and public choice. Mason, OH: South-Western Cengage Learning. Lindeman, J.B. (2002). Microeconomics. Hauppauge, NY Barron's. McEachern, W.A. (2013). Economics: a contemporary introduction. Mason, OH: South-Western Cengage Learning. Mishkin, F. S., & Eakins, S. G. (2012).

Financial markets and institutions (7th Ed.). Upper Saddle River, NJ: Prentice Hall. Wolla, S.A. (2013). “Choices Are Everywhere: Why Can’t We Just Have It All?”Page One Economics Newsletter. Retrieved on November 1, 2013 from http://research.stlouisfed.org/pageone-economics/pages/newsletter_summary.php?edition=classroom

Read More
Cite this document
  • APA
  • MLA
  • CHICAGO
(“Choices Are Everywhere:Why Can't We Just Have It All Article”, n.d.)
Choices Are Everywhere:Why Can't We Just Have It All Article. Retrieved from https://studentshare.org/finance-accounting/1490055-ypchoices-are-everywhere-why-canyiet-we-just-have
(Choices Are Everywhere:Why Can'T We Just Have It All Article)
Choices Are Everywhere:Why Can'T We Just Have It All Article. https://studentshare.org/finance-accounting/1490055-ypchoices-are-everywhere-why-canyiet-we-just-have.
“Choices Are Everywhere:Why Can'T We Just Have It All Article”, n.d. https://studentshare.org/finance-accounting/1490055-ypchoices-are-everywhere-why-canyiet-we-just-have.
  • Cited: 0 times

CHECK THESE SAMPLES OF Choices Are Everywhere:Why Can't We Just Have It All

The Grapes of Wrath: Market Structure Analysis

He talks about how he sees cars move west all day and the only ones that stop in his station are the ones that have no money.... There are millions of producers around them but the buyers don't have money and can't afford the good crops.... irms have some control over prices, but the demand curve remains downward sloping and elastic.... we also notice how the owner tries to imitate the company stations with the yellow paint but fails because of the loose hangings and the old cracks in his beaten old station....
7 Pages (1750 words) Essay

The deal with the devil

With only two bottle of beer, he felt his head becoming very heavy all of a sudden.... ou have no choice.... For the sixth time, he picked up and scanned the pile of paper from its envelope on his bare wooden table.... David blankly stares at the papers, pages to pages, scanning its figures and the total of his credit in the bank that is reaching 6-digits already....
4 Pages (1000 words) Essay

World Hunger Epidemic

Thus, we just because are not affected by such maladies forget about those who are caught up in such problems.... We, in negation of all humanitarian values and morals, no longer seek to help out those who are less fortunate or are caught in unfavorable situations and circumstances.... This paper stresses that there are people and organizations that still care about people that are hungry and do not enjoy all privileges as the minority of world does....
6 Pages (1500 words) Essay

Law of Increasing Opportunity Cost

For example, if an asset such as capital is used for one purpose, the opportunity cost is the value of the next best purpose the asset could have been used for.... If another better option was available, the opportunity cost is the benefits we could have received by taking that option.... While solving problems we normally opt for the best possible solution.... It is capable of describing the economic terms like scarcity and choice and moreover, it can establish the relationship between the two scarcities and choices....
8 Pages (2000 words) Research Paper

Hills like White Elephants by Ernest Hemingway

can't we maybe stop talking?... ‘It's all right.... Especially all the things you've waited solong for, like absinthe.... ‘all right.... That's all we do, isn't it – look at things and try new drinks?... ‘all right.... ‘It's not really an operation at all.... ??I'll go with you and I'll stay with you all the time.... ??And you think then we'll be all right and be happy....
2 Pages (500 words) Essay

People in New York City and Suburbs

This is because people will pay whatever they have to.... She and her husband, even now, have her name listed on waitlists in the most exclusive schools that Manhattan has to offer.... To not have your child in these schools is a tremendous source of embarrassment.... Rather, one must have an invitation, which will be checked by security and perhaps, if you are lucky you may find your way into the VIP section and enjoy a glass of Krug....
8 Pages (2000 words) Case Study

Animation Industry in the UK

Based on all these inputs, I have drawn conclusions and made recommendations.... This paper "Animation Industry in the UK" focuses on the fact that the author has focused on the question “is it advisable to start an independent animation company in the UK?... rdquo;.... Being a student of animation, his answer did not purely concentrate on the business aspects....
20 Pages (5000 words) Dissertation

The Changing Role of the Internet

Individual advancement may be co-related with technological advancement in such a way that internet access may have a positive and negative effect on every individual (Nomura, 1997-1998) 1.... ) Direct Access to Information - an individual may have direct access to information related to world news; in the case of students' research for a school requirement or present development in the process of learning gained from teachers in the school; in the case of employees' presentation in line with their work may be easily found in the World Wide Web....
12 Pages (3000 words) Term Paper
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.
Contact Us