Real Life Application Observations
The basic law of Supply and Demand:
If the demand increases and the supply remain unchanged a shortage occurs, leading to higher prices. This is one of the most relevant laws of economics that can be applied to real life. Let us take an example of today’s real estate market. The real estate prices have increased almost five to six times over past twenty years. This is mostly due to the influx of more and more people into our cities. Who thought that there would be a day where we would actually buy water! Thanks to the ever-increasing population and global warming, the demand for water has increased but its supply hasn’t. Most of the countries are experiencing erratic weather changes and less rainfall. This has resulted in the shortage of portable water. Some of countries even have a water-tax where they charge you for the amount of water you consume! So, the principle of supply and demand is so relevant in this case. Another example of this is gasoline. It has become a norm that the gas prices have to increase during the winters. Reason being the winters when most of the people use it for heating their homes. Similarly, when demand decreases and supply remains unchanged, a surplus occurs, leading to fall in prices. Laptops are a classing example of this principle. Since last five years, I have noticed that there has been a dramatic fall in the prices of Laptops, mainly because of the arrival of smartphones and tablets. Laptops that would earlier cost about $400 are today available at half the price. The reason for this price reduction is fall in demand but no reduction in supply. Who, knows, In future, even demand for smartphones and tablet might fall and so do their prices!
“Nowadays, people know the price of everything and the value of nothing”-Oscar Wilde
We had learned this in our English class, but I can relate this to my life so easily. These simple yet profound words by Oscar Wilde tell us the way to lead our lives. Today, competition and materialism have made people so money-minded that they cannot see anything beyond money. Any person would love to own a house but does he have the conviction to build it? We have been taught that in order to be happy in life, we need to study and become big men who would be the future doctors, engineers and architects. But can someone teach us to be good human beings? Is all the motivation to succeed only related to money? Today, I think it is more important to sleep peacefully at night that to have millions and have sleepless nights. Because those sleepless nights might give us a heart attack and we may not live to enjoy that wealth! In other words, doing what we love will allow us to give all that we have to it. We should find something we enjoy, we must find where our talent lies. Because, no one is born without talent. We need to find it and develop it into something we can sustain and build. No doubt, most of great men like Steve Jobs, Usain Bolt, Micheal Jordan, Bill Gates and Nelson Mandela did what their heart said. They are not doctors, engineers, architects; some of them were not even graduates, but they changed the world in their own unique ways. It is very important that people start ‘valuing’ small things around us. It would be a great way to develop a unique new perspective towards life. By valuing small things, we can value life. Because every drop of water slowly and steadily makes an entire ocean!
Principle of Opportunity costs -Opportunity loss.
We have learnt in economics that opportunity costs are those costs that do not necessarily have a monetary value, but it is a loss of value when a person chooses one alternative over the other. This is one concept that is applied in our daily lives, be it professional, academic or personal. Let us take example of a professional situation. When I work as an Intern in an advertising firm, my Manager assigns me a task. I start working on the task, get acquainted with the system, but, in the middle of the task, my manager pulls me out of the project and assign it to someone else. Although there is no monetary loss while re-assigning the work, there is definitely an opportunity loss where I would have been much more efficient had I got chance to complete the project. It would have taken less time as I was already acquainted with the system and would have efficiently completed it. The other guy, being new, would take time in getting acquainted with the system and this would result in an opportunity loss. Another example for this could be in my personal situation. I was supposed to go at my friend’s birthday party last Saturday. But I could not make it as I was unwell. On Monday, when I met that friend, he showed me all the photographs and videos of Saturday’s bash. When I saw those photos and videos, I was heartbroken and disappointed. All my friends attended the birthday bash and it was amazing! If the photographs and videos were so good, I could image how good the bash would have been? Speaking in theory this was definitely an opportunity cost and an opportunity lost!
Principles of Attraction
According to the principle, when positive and negative charge comes closer to each other, they attract. This law also applies to all the aspects of life in a practical way. At a personal level, this means to me that every positive or negative thing that is happening in my life was attracted or inspired by my own self. ‘Attraction’ also means that whatever a person learns in his life is through combination of positive and negative experiences. In professional life, this means that to succeed at workplace, it is important to make mistakes and learn from them, by making mistakes, a person learns how not to do a particular thing. This is the meaning of experience and learning. I was about to prepare a price contract for my company. Since I had made many mistakes while preparing draft contract, I knew which were the area where I could make mistakes. I had learned from my mistakes and had corrected them, while preparing the contract I would take all those lessons learnt in mind and will not repeat my mistakes. If I had not made those mistakes earlier, had I not learned from them, then it would be possible that I would have made those mistakes while preparing the big-contract. I prepared the contract, and to my amazement, there were no mistakes in the final draft. So, my mistakes, which were a ‘negative’, combined with my accuracy, which was a ‘positive’, and resulted in a flawless contract which gave me the company’s appreciation and respect. This is one of the best examples of principles of attraction. It can also be applied in personal life where two people, with different habits and interests become best-friends because they get to learn so much from each other. They complement each other!
