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Microeconomics Assignment 2

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Submitted By willbellavance
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GSE-1003 Microeconomics
Bernard C. Beaudreau
Assignment No. 2
Question: One of the key principles in economics is the notion of a tradeoff. People are confronted with tradeoffs and hence are required to make choices. Describe two tradeoffs that you face in your everyday life and briefly describe the decision rule(s) that you use to make decisions in these cases.
Tradeoff #1
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You surely know, as a university teacher, that students have to do a lot of work outside of classes. In fact, students spend more time in books at home than in classes. Every day, I face a choice in whether I should study or do my leisure activities. As I look at those two options, I make a decision using simple decision rules. If I choose to do my homework and keep myself up to date in my courses, then I will probably have better grades at the exams and quizzes, but I won’t really like my evening and go to bed bored. However, if I occupy my time to my leisure activity, I’ll have a better evening, whether I go out with my friends or I pass some time watching sports on TV, but I’ll start being late in my courses and it will be hard to make up for all the time I wasted. To conclude, this trade-off is decided more by what I want now, versus what I later. Hence, I will often choose to study and make my homework, but still give myself a little brake once in a while.
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Tradeoff#2
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Also, because my classes finish often just before lunch, and I don’t have time to go back home, I often have to eat at school. So I have to choose whether I should make myself a lunch and wake up earlier, or eat at school and give myself a little more sleep before school. My first option is to make a lunch. This requires me to get up earlier and lose a bit of sleep. On a night where I might have studied late, this lack of sleep might be the difference in my course whether I’m too tired to be an effective student. However, I won’t need to spend my money on a lunch and it’ll help me save more. Next, if I decide to stay asleep a little longer, I will be more effective while listening. On the other hand, it will cost me a lot of money on a long-term point of view. Indeed, I can’t get a complete lunch under 10$. To conclude, more often, I will get up earlier and make myself a lunch so that I won’t have to spend my money. If I keep myself up to date, then I won’t even have to study late and I’ll get all the sleep I need.
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