Economic Decision

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How People Make Economic Decisions
Craig Nickels
ECO 212
July 26, 2010
Joshua Long

How People Make Economic Decisions
“Should I order the lobster or the chicken?” This is a choice a consumer may have when dining at a local restaurant. It also represents a deeper meaning when approached using the principles of economics. Three key economic principles that can be used in decisions people make concerning their time and money are people are rational, they respond to economic incentives, and optimal decisions are made at the margin (Hubbard & O'Brien, 2010). We face economic decisions every day; some may be trivial like the choice between lobster and chicken, and others more seismic in impact on our future. I will explore an economic decision I am currently facing which allows me to examine the marginal costs and benefits, opportunity costs, and possible incentives that could alter my decision. I recently moved to Minneapolis for a fresh start from the doldrums of the Michigan economy. Since April, I have been searching for a job. What started as hope for an immediate career opportunity had slowly diminished to “I just need a job!” After months of submitting my resume to lofty positions, I found myself grounded without a bachelor’s degree and running out of money. I was offered, and accepted, a position at Caribou Coffee for $8.00 per hour. A humbling endeavor, but an endeavor nonetheless. I continued to submit my resume between making lattes and doing homework. I received a call from a recruitment firm for the Target Corporation that had my resume. They informed me that Target wants to interview me for the position of Merchandise Remodel Coordinator that pays $11.50 per hour at their corporate headquarters in downtown Minneapolis. This would be a contract position through January 2011. I have already been offered a store management position with Caribou after three weeks of employment. The constant in this scenario is that I...
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