What every millennial should know about Economics:

What every millennial should know about Economics:

The second installment is sometimes the best.
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Once again, I am here to teach you a little more about economics. I hope that my previous article was helpful. The overall goal of these articles are to be informative- and should help settle some minor debates about definitions. As I mentioned previously economics are not an exact science. I previously addressed macro and microeconomics- what are these two terms? How do these affect you? Well, the short answer is that it depends. As I previously mentioned- we do not all have that large of a sphere of influence within the macroeconomic aspect- which is why we have the aspect of microeconomics. Within society we engage and perform hundreds of transactions a week, and businesses process a very large volume of these daily. In this article we are going to talk about basic forms of economics which go beyond the movement of cash. Previously we discussed market elasticity, and now I'm going to factor those definitions into this article.

This movement of money through these transactions have an effect on both micro and macro economics. So lets get some definitions down: The difference between micro and macro economics is simple. Microeconomics is the study of economics at an individual, group or company level. Macroeconomics, on the other hand, is the study of a national economy as a whole. Microeconomics focuses on issues that affect individuals and companies. For example when we go to the store and buy ourselves coffee in the morning, we are operating on a microeconomics level, when we examine this from the perspective of a business chain along the eastern seaboard, we are crossing into the Macroeconomics level.

Opportunity costs:

People constantly face trade-offs. They have to make choices due to scarce resources. As a result, they can’t get everything they want, so they have to pick certain things over others. Opportunity costs describe the value of the next best alternatives that are given up during this process in order to get something else. In my last article I talked about how everything you do has a price, whether it's time, effort, money, or something else. A great real life example of this is taking off a week of work to travel to Europe without paid vacation. You may see it as just taking vacation, but you not only lose the money you would have made by not working, but you also spend money and in that sense that opportunity cost is high, however you are exchanging your time and paying a higher price for your vacation than you might have considered. So you've traveled to Europe and left the US. You are no contributing to global macroeconomics since you've left your home, and are exchanging money for goods and services elsewhere.

Trade and exchange:

An understanding of 21st century globalization begins with one principle, the principle of exchange. People will only exchange if they expect to gain more than they give. When they exchange, they give up something of lesser value to themselves for something they want more. As a result, both parties are better off. Juan trades Maria his apple for her orange. He likes the orange better than the apple; she likes the apple better than the orange. Both Juan and Maria are better off after the trade. (If Juan is trading with Maria just to get to know her better, he is still gaining more than he gives even if he doesn't like oranges at all!) The value of the exchange is subjective. The principle of exchange states that voluntary exchange benefits both parties and increases the well-being of both traders.

Let's define comparative advantage: If an economic actor has the ability to produce a good or service at lower opportunity costs than another actor, they are said to have a comparative advantage. In the presence of comparative advantage, all actors can benefit from cooperation and trade if they specialize in producing and exporting the goods and services they can produce more efficiently than others.

Now, we can stop looking at economics as more than just the exchange of money. From a business process standpoint, economics have their own ebb and flow. Just as you can trade a friend lunch for a ride to a place we deal with some new concepts. This week, I will introduce comparative advantage. We'll say your friend Harry, has a car, and you do not for whatever reason. You and Harry are both hungry so you offer to buy Harry lunch, in exchange for a ride to somewhere you need to go. Harry agrees and you both get something you want. Now, what just happened is that you used Harry's comparative advantage that is to say he has a car and you do not. Harry has used his vehicle and time to gain paid lunch. Everyone wins here.

referring back to to the ebb and flow:

Fiscal policies have influence on economics.

One way for the government to monitor and influence a country’s economy is by adjusting its spending and tax rates. The concept of fiscal policy states that increased government spending and lower tax rates will stimulate economic activity, whereas a decrease in government spending and higher tax rates will decelerate it. Thus fiscal policy can be used as a means to smooth economic fluctuations (i.e. booms and busts).

In conclusion- we have thousands of factors that affect how much every single thing we buy, whether it be fuel costs going up- thus raising the price of logistics, thus raising the price of shipping and handling, and finally the cost is raised in store because supply and demand curve has shifted and prices have adjusted accordingly. Every single day economics affects you- even if you do not buy anything, by doing that you have contributed to supply and demand. It is interesting to see the dots start to connect in your life with everything you purchase and even the things you don't.

Cover Image Credit: pixabay free images

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I Blame My Dad For My High Expectations

Dad, it's all your fault.
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I always tell my dad that no matter who I date, he's always my number one guy. Sometimes I say it as more of a routine thing. However, the meaning behind it is all too real. For as long as I can remember my dad has been my one true love, and it's going to be hard to find someone who can top him.

My dad loves me when I am difficult. He knows how to keep the perfect distance on the days when I'm in a mood, how to hold me on the days that are tough, and how to stand by me on the days that are good.

He listens to me rant for hours over people, my days at school, or the episode of 'Grey's Anatomy' I watched that night and never once loses interest.

He picks on me about my hair, outfit, shoes, and everything else after spending hours to get ready only to end by telling me, “You look good." And I know he means it.

He holds the door for me, carries my bags for me, and always buys my food. He goes out of his way to make me smile when he sees that I'm upset. He calls me randomly during the day to see how I'm doing and how my day is going and drops everything to answer the phone when I call.

When it comes to other people, my dad has a heart of gold. He will do anything for anyone, even his worst enemy. He will smile at strangers and compliment people he barely knows. He will strike up a conversation with anyone, even if it means going way out of his way, and he will always put himself last.

My dad also knows when to give tough love. He knows how to make me respect him without having to ask for it or enforce it. He knows how to make me want to be a better person just to make him proud. He has molded me into who I am today without ever pushing me too hard. He knew the exact times I needed to be reminded who I was.

Dad, you have my respect, trust, but most of all my heart. You have impacted my life most of all, and for that, I can never repay you. Without you, I wouldn't know what I to look for when I finally begin to search for who I want to spend the rest of my life with, but it might take some time to find someone who measures up to you.

To my future husband, I'm sorry. You have some huge shoes to fill, and most of all, I hope you can cook.

Cover Image Credit: Logan Photography

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Phoenix's Largest Electricity Provider Anticipates A Price Decrease For Customers

Yes, you read that right, a decrease.

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Bills are never exciting to receive, and Salt River Project, Phoenix's largest supplier of power and water, knows that. In hopes of giving back to its customers, this not-for-profit company is proposing a lower billing price to its elected board of directors.

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According to Salt River Project Media Manager Scott Harelson, SPR is planning a price decrease of 2.2 percent on the overall average annual amount. The plan was first created over a month ago, and if it's approved, the new utility prices will appear in the May 2019 billing cycle.

"We have been able to save a lot of money with our fuel expenses, and we pass those savings on directly to our customers," Harelson said, but how else is a not-for-profit company able to decrease prices? SPR's website has the answers:

"According to SRP General Manager and CEO Mike Hummel, SRP has been able to keep prices stable for the past four years through prudent operations and management, strategic resource acquisitions and taking advantage of market conditions that have allowed SRP to generate a greater share of energy using lower-cost natural gas."

SPR serves more than 1 million customers, and customer growth will continue to benefit prices and plan options. You can find more details on this good news on SRP's website.

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