March 31, 2013
Week 2: Supply and Demand
There are many factors that play a role in the decisions that we make, especially in the economy. We could be faced with a decision to purchase a new home, or we could be faced with a decision that our child needs to go to college needs help paying for it. No matter what decision that we are faced with, the laws of supply and demand play and important role. I have been faced with many financial decisions in my life. One important decision that I have been faced with, and I have been faced with it more than once, is purchasing a new car. Throughout my life, I have had very bad luck with vehicles. It seems like every year I have to buy a new car because they always break down on me and I never have enough money to fix them. This past year I have finally saved enough money to purchase another one, but this time I feel as though I have enough money to buy one that will last me longer than a year. A few months ago, I was driving past a car lot and noticed that there was a very nice looking vehicle sitting in the lot. I stopped to take a look at it, but the seller was asking way too much for the car. About a month or so later, I drove past the car lot and seen the same car that I had looked at previously, except this time the price had dropped! I could not understand why until now, the laws of supply and demand. There are many factors that could cause changes in the supply and demand curve. One factor that could cause changes in the demand is a person’s income. If a person loses their job, then they may not have enough money to buy a car, or if a person receives a promotion and an increase in their wages, then they may be able to save more money to purchase a car. Another factor is a person’s tastes. For example, a person may not like a certain type of vehicle or they may only believe in purchasing foreign vehicles. Other factors are expectations, the number of...