What is really Economics?
Economics is basically the study of:
1) limited resources (limited supply)
2) unlimited wants (unlimited demand)
So, we need to find an equilibrium between the limited supply and unlimited demand to determine the equilibrium point.
In normative economics, the seller would try to stretch as much the limited supply and buyer would reduce their unlimited demand in the real world as time progress, leading to cheaper and more quality goods due to the "invincible hands"
However, if some goods (luxury goods) will to be expensive, substitution goods will be more expensive as well, as there will be hoarding in the supply chain or more demand in the real world for substitution goods especially Graffian goods (Goods for the masses).
But, if luxury goods become cheap, complementary goods will be cheap because as limited demand for luxury goods will also reduce demand for ancillary goods.
Nevertheless, all these falls under the ceteris paribus concepts (everything stays equal) and laizer farrie (free economics).
What about Parallel Economics during Economics or Humanitarian Disaster?
What is important during Economics or Humanitarian disaster is still - grab, ground, gasoline, gun, and gold.
Here, the limited resources will be difficult to come by due to disruption of the supply chain and we would need to be more discreet in our choices now as we have small finite resources that we could trade for necessity of life continuum - for a person dying of thirst, water would allure him more than all the gold and diamond in the world.
Hence "water worth more than gold in the desert" and we might even see a mirage of an oasis in the desert.
So, the moral is we need to "make choice every day".
We need to make decisions based on "What gave the best utility?" or "What gives the best profit?" or "Better what gives the best profit at lowest risk?" so that we "maximize our unlimited wants with finite resources."
"Best Profit at lowest risk" is the basis of "Risk management."
Good Luck! Amigo!
Yours Sincerely,
Dr Lion.
Economics is basically the study of:
1) limited resources (limited supply)
2) unlimited wants (unlimited demand)
So, we need to find an equilibrium between the limited supply and unlimited demand to determine the equilibrium point.
In normative economics, the seller would try to stretch as much the limited supply and buyer would reduce their unlimited demand in the real world as time progress, leading to cheaper and more quality goods due to the "invincible hands"
However, if some goods (luxury goods) will to be expensive, substitution goods will be more expensive as well, as there will be hoarding in the supply chain or more demand in the real world for substitution goods especially Graffian goods (Goods for the masses).
But, if luxury goods become cheap, complementary goods will be cheap because as limited demand for luxury goods will also reduce demand for ancillary goods.
Nevertheless, all these falls under the ceteris paribus concepts (everything stays equal) and laizer farrie (free economics).
What about Parallel Economics during Economics or Humanitarian Disaster?
What is important during Economics or Humanitarian disaster is still - grab, ground, gasoline, gun, and gold.
Here, the limited resources will be difficult to come by due to disruption of the supply chain and we would need to be more discreet in our choices now as we have small finite resources that we could trade for necessity of life continuum - for a person dying of thirst, water would allure him more than all the gold and diamond in the world.
Hence "water worth more than gold in the desert" and we might even see a mirage of an oasis in the desert.
So, the moral is we need to "make choice every day".
We need to make decisions based on "What gave the best utility?" or "What gives the best profit?" or "Better what gives the best profit at lowest risk?" so that we "maximize our unlimited wants with finite resources."
"Best Profit at lowest risk" is the basis of "Risk management."
Good Luck! Amigo!
Yours Sincerely,
Dr Lion.
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