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Macro & Microeconomics
Pages 2 (502 words)
The job did cost him $800. As per the writer it would have cost him much less for the maintenance, had he been an expert on cars. Still, he does not desire to…
The writer loves food so he learnt to cook. However, his musician friend rather chooses to pay for his lunch so as to be able to spend more time doing what he loves to do, which is music. According to writer, people spend their scarce time and money on doing things that endow them with higher utility or provide them with a relatively higher remuneration. Nobody has enough time and money to invest them on learning everything. That is why people choose to pay others for the products and services they avail from them, by spending the money they earn doing things they love to do or that provide them with a higher remuneration. Division of labor is the direct outcome of the scarcity of time and resources.
The given article teaches much about the opportunity cost. Thereby, as per the article, if a person chooses to do the work he loves, she is not left with enough time to spend it on learning a variety of other things. Hence, to be able to do the things a person loves, one has to forgo doing many other things, which is the opportunity cost of choosing to do one specific thing. Hence, while procuring services, people act as the typical economic man and resort to rational thinking. They clearly assort the objectives they intend to achieve in life and allocate their time and money in a way that harmonizes with and furthers the objectives they intend to achieve in life. For example a musician may choose to learn to play guitar instead of learning to cook or repair cars, because she loves music and it is her profession. To make the best use of their time and money, people resort to trade offs and chose the best possible alternatives that suit their liking and pocket, while choosing a profession or acquiring skills. With the money they earn for this work, they prefer to pay people who specialize in other vocations or skills, which they don’t know and don’t have the time to or aptitude learn.
This article also teaches much about the scarcity or limited nature ...
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