Business Economics 1 - Essay Example

Today I wasted minutes and gas looking a free space and when I saw it somebody else also wanted it. Harry wanted it but I was an inch ahead of him, so I had the right of way. If he wanted it very badly he could have paid me. Nothing is free in this world; as the saying goes, there is no such thing as a free lunch. In economics we deal with the problem of scarcity, and all of us try to beat this problem so that we can get what we want. An economist (Arnold 5) says that a rationing device is needed for society to enable its members to get what they want.

A common rationing device is money (dollars), and you are out there in front if you have money. Thats why we study to earn a degree (to earn more money later), and thats why some work instead of studying for a degree (to earn money now). Is parking free at the mall? It is free for those who come early or for those who are lucky that somebody has just come out to vacate that space. It is not free for those who dont get it. While opportunity cost is a concept used when we make choices, here the situation is forced on one, and yes, there is a cost, because you could have spent the time (and the gas) elsewhere where you could gain some utility.

I said that I got slightly ahead of Harry, so I had the right to the parking space. Suppose we got there at exactly the same time? We could have settled it with a display of intimidation: If I were bigger and more muscular, if my car was a Mercedes-Benz and Harrys was a Kia, or if he could see that I had a gun; or in a spirit of fairness, we could have tossed a coin, or done something similar to break a tie, and I would have said thats what life is like. Theres a lot of chanciness in the world in which we live.

If we arrived at that point at the same time and I needed the park first because I would lose an important opportunity by missing an appointment, I would not wait for the tossing of a coin. I would pay Harry an