How People Make Economic Decisions 2
Four Principals of Individual Decision Making
People Face Trade offs
Making individual decisions requires that some type of exchange or trade off occurs. A
decision will always have an effect, or consequence. A great example would be to look at
the situation in Iraq. The US Government has been spending substantial amounts of money
to have troops occupy Iraq, this expenditure seeps into the budget of spending and investing
to raise this country??™s standard of living.
As we go through a decision making process, one aspect to consider is to compare the
costs and benefits associated with an alternative course of action. A simple example is to
examine the costs and benefits of going to school. Even though the benefits of school will be
obtaining a degree and knowledge, an opportunity cost may be the time spent at school
takes away from the hours spent working and earning money.
Rational people recognize that decisions are rarely straight forward and easy. Economists
use the term ???marginal changes??™ to describe small incremental adjustments to an existing
plan of action (Mankiw, G, p6, Principles of Economics, 2007).
An example of this is a company that manufacturers goods. Hypothetically, workers are paid
$9 an hour to package frozen dinners. In an 8 hour shift 500 frozen dinners are packaged, if
the workers have to work overtime, the company has to pay them $3 an hour more- which is
the marginal cost for additional frozen dinners to be packaged. The marginal benefit is
increased volume, and therefore revenue.How People Make Economic Decisions 3Incentive
Incentives are a vital part in individual decision making. An example of how incentives
drive our decision making can be related to gas taxes and small vehicles. Amongst other
reasons, continents like Europe and Australia drive smaller cars because they are more fuel
efficient, which is an incentive due to the high gasoline taxes in these parts of the world.Comparing Marginal Costs and Benefits in Personal Decision Making An example in which I compared marginal costs and marginal benefits is when I was
deciding which University to attend. Following my research in Universities in LA and which
would best meet my goals and needs, I narrowed it down to two Institutions; Pepperdine
and Phoenix. Both of these Universities met my major needs and goals, however there were
small differences that impacted my final decision.
Obviously, my final decision was Phoenix. The marginal benefits associated with this
decision included the time frame in which I could finish my degree. Although both
Universities offered a program for the full time working adult, Phoenix offered an accelerated
option in which I could finish even quicker. This met my goal of completing my degree as
quick as possible.
The marginal cost in my decision to attend Phoenix related to the lack of prestige
associated with the brand name Pepperdine carries. Even though Phoenix is a legitimate
University, Pepperdine is an older institution with a renowned business school, in the real
world this may be taken in consideration in employment situations.
How People Make Economic Decisions 4 Incentives that could have led me to make a different decision is if Pepperdine had a
program in which additional classes could be taken that would enable me to finish my
degree in less than 2 years.Explain how the principles of economics affect decision-making, interaction, and the workings of the economy as a whole.
Coping Styles and Psychological Preparation
Axia College-University of PhoenixA cardiac cauterization has been scheduled for Gerry a 64-year-old male, he will be tested for any cardiovascular disorder. Gerry is alert and motivated to determine what may be the cause of the chest pain and shortness of breath he has been experiencing. Because Gerry has responded to his symptoms in a responsible way by immediately seeking medical care and trying to determine the cause behind his illness, one may deem Gerry one who is dealing with his issue with problem-focused coping efforts. (Associated Content, 2009). Though; Gerry??™s primary coping strategy is one motivated by problem-solving, Gerry is showing additional signs of emotional response because he has not confided in his wife about the symptoms he has been going through.
I believe that because Gerry displays a style of coping that is problem-focused or one displayed by individuals who use attention as a coping method. It is my belief that the best psychological preparation method for Gerry to apply is that of informational control. Although people normally go through anxiety as, he or she prepare for any type of medical procedure, the informational method permits an individual to understand the steps that they will go through and respond in a positive manner. Decreasing Gerry??™s anxiety by having the appropriate information may allow Gerry to respond in a positive manner to his pending procedure. References
Associated Content Inc. (2009). Two Different Coping Strategies: Problem-Focused Vs. Emotional-Focused Coping. Retrieved on August 24, 2010, from http://www.associatedcontent.com/article/1051057/two_different_coping_strategies_problemfocused.htmlcat=5
Axia College of University of Phoenix. (2007). In The Hospital: The Setting, Procedures, and Effects on Patients. Retrieved August 24, 2010, from Axia College, Week Six reading, aXcess, HCA 250-The Psychology of Health course web site..
Individual decision making is based on ten principles; four of the ten principles are people face trade-offs, the cost of something is what you give up to get it, rational people think at the margin, and people respond to incentives. Purchasing a new vehicle encompasses all of these principles where one needs to compare the marginal benefits and the marginal costs. In my experience of purchasing a new car and comparing the marginal benefits with the marginal costs, I compared a Toyota Matrix and a Kia Spectra 5.
Fairleigh Dickinson University
How People Make Economic Decisions
Individual decision making in regards to economics includes trade-offs, giving something to get what you want, rational people thinking at the margin, and people responding to incentives. People facing trade-offs requires a person to give up one thing to acquire another. The cost of giving something to get what you want involves giving something of value now to reap a long term gain. Rational people think at the margin and establish plans to accomplish specific goals while allowing the possibility for adjustment to their plan, (Mankiw, 2007). Incentives are how many rational people base their decision making. An incentive could cause a person to alter their original plan because the incentive could make more sense for their given situation.
Deciding the Marginal Benefits and Costs
Last year I was researching the automobile market to buy a new car. The price of oil skyrocketed and my current vehicle at the time was an SUV getting about 17-20 mpg. Earlier that year, I accepted a job that required me to drive 30 miles each way and I found myself spending a considerable amount of money on fuel. Although, fuel economy was the main motivation for purchasing a new vehicle at that time, I also took into consideration what I was willing to sacrifice to purchase the car. The budget for the new car purchase was no more than $15,000.00. The car budget and the features I was looking for had me considering the Toyota Matrix and the Kia Spectra 5.
The Toyota Matrix??™s cost was $15,200.00 and I could get the Kia Spectra 5 for $14,200.00. Although, I wanted the Toyota because I preferred its look and I was familiar with Toyota??™s quality, but the Kia offered a seven year/100,000 mile warranty. The marginal benefits and the marginal cost that I had to consider was that I preferred the look of the Toyota more and liked its reliability record, but the cost to own it was greater. In the end, I chose the Kia because I was not willing to pay the higher price to own a car that will serve the same purpose as the less expensive car.
Incentives and How the Principles of Economics Affect Decision Making
If Toyota offered cash back incentives coupled with a large enough discount on an extended warranty than I may have chosen the Toyota instead. The principles of economics affect decision making in all things that people need and want. People react to the economy and apply the principles of economics which can have a major effect on interaction. The state of the economy whether good or bad can have a major effect on trade both domestically and internationally. Consumers respond to prices, incentives, and rational decision making to purchase goods. When the principles of economics are applied by consumers and sellers of goods, the inner workings of the economy as a whole are directly affected.
The Principles of economics is based on human behavior and how it affects the economy. Marginal benefits and marginal costs coupled with incentives have a direct impact on how people spend their money. These decisions have a major effect both positive and negative on the economy as a whole. The decision making of the consumer can dictate the state of the economy and how manufactures interact with consumers. This interaction can also have a major affect on the global economy as well. References
Mankiw, N.G. (2007). Principles of Economics (4th ed.). Mason, OH Cengage Learning Retrieved from: http://ecampus.phoenix.edu/classroom/ic/classroom.aspx
Learning from a leader
Transformational leaders will inspire their learners through what they have learned and encourage them (Leggat, 2009). A leader will give the learners support and show new ways to handle COPD (Leggat, 2009). This leader will help learners to manage their disease, Chronic Obstructive Pulmonary Disease (Leggat, 2009). A leader will show the learners how important it is to:
* Stop smoking (Davenport, Estridge, & Zygmont, 2008).
* Good oral care to reduce infections (Davenport, Estridge, & Zygmont, 2008).
* The proper use of inhalers, bronchodilators (Davenport, Estridge, & Zygmont, 2008).
* Take medicine as directed by the doctor (Davenport, Estridge, & Zygmont, 2008).
* The proper use of oxygen therapy and neubulization therapy (Davenport, Estridge, & Zygmont, 2008).
* Give referrals to breathing conditioning programs (Davenport, Estridge, & Zygmont, 2008).For Help
1. The Breath and Lung Institute at Hackensack University Medical Center (“Www.humc.com – Breath and Lung Institute,” 2010)
30 Prospect Avenue, Hackensack, NJ 07601, 201-996-2211 (“Www.humc.com – Breath and Lung Institute,” 2010)
2. National Heart Lung and Blood Institute
3. State of New Jersey
4. British Lung Foundation
www.lunguk.orgMichele C. De Vito, RN, CRN
193 Johnson Avenue
Dumont, New Jersey 07628
Phone: 201-280-0511CHRONIC OBSTRUCTIVE PULMONARY DISEASE (COPD)
Do not SMOKE!!! (Microsoft, 2010)
85 % of people with COPD SMOKE (Warren, 2009)
What is copd
Chronic Obstructive Pulmonary Disease is a chronic disease which affects breathing. This chronic disease does not get better and will get worse over time (Glastonbury, 2009). A person will get this chronic disease if they smoke or exposed to pollutants over a long period of time (Glastonbury, 2009). A person will not be able to breathe and give the body the air it needs to survive.
Facts about COPd
* Fourth leading cause of death (Carlin, 2007).
* Death is increasing in numbers instead of decreasing over time (Carlin, 2007).
* Smoking causes COPD (Medbo & Melbye, 2008).
* People age 50 to 60 are more likely to get COPD if they smoked (Medbo & Melbye, 2008).
* A person may become depressed because of COPD, the symptoms and restrictions this disease causes (Warren, 2009).
* Women get COPD more than men because more women are smoking over men (“Free Breather: COPD Statistics,” 2009).
anatomy of COPD
When a person takes a breath in, the air gets stuck in the little branches called respiratory bronchioles, air sacs called alveoli and air ducts called alveolar ducts that fill lungs (Davenport, Estridge, & Zygmont, 2008). When this air is stuck in the tract, this will lead to respiratory infections (Davenport, Estridge, & Zygmont, 2008). When a person with COPD is sick all the time their lungs can??™t heal and their airway is restricted (Davenport, Estridge, & Zygmont, 2008). symptoms
A person can tell they have COPD by the symptoms they have (Medbo & Melbye, 2008).
* Coughing and making copious amounts of sputum (Medbo & Melbye, 2008).
* Wheezing (Medbo & Melbye, 2008).
* Little or no breath sounds, wheezing or crackles, will be heard when the doctor listens to a person??™s lungs (Davenport, Estridge, & Zygmont, 2008).
* Use of accessory muscles to breathe (Davenport, Estridge, & Zygmont, 2008).————————————————-
* X-ray ??“ a picture of a person??™s lungs with a specials camera (Glastonbury, 2009).
* ABG??™s (Arterial Blood Gases) – taking a sample of a person??™s blood for testing to see if there is enough oxygen and not too much carbon dioxide (Glastonbury, 2009).
* Spirometry – a test to measure how fast and how much a person takes a breath in and out (Glastonbury, 2009). ways to Help you breathe easier in the future
* Stop smoking (Glastonbury, 2009).
* Take medicine as prescribed by the doctor (Glastonbury, 2009).
* Stay away from others who are sick (Glastonbury, 2009).
* Get plenty of exercise and know limitations (Glastonbury, 2009).
* Stay away from pollution in the air (Warren, 2009).
* Do things slowly to conserve energy and ask for help (Glastonbury, 2009).
* Wear clothes that are loose fitting (Glastonbury, 2009).