Economics has been defined by Colander as “the study of how human beings coordinate their wants and desires, given the decision-making mechanisms, social customs and political realities of their society” (Colander, 2012, p. 4). To further define this definition, coordination relates to the production goods and those goods are procured and to what price and quantity. A true economists mind relates, compares, and analyzes the cost benefits with every decision. Microeconomics is now the how to or the in depth study on the individual and what affects that individual choices with regard to the economy.
The main economic force or factor that affects pricing and the cost to the individual for each good or services is through supply and demand. Supply and demand curves and laws will show what the current or most optimization point of price to quantity of goods in the marketplace. For example, if the price of an object is set too high, the consumer will be less incline to purchase the good and will either hold off purchasing till that good is cheaper or will buy a substitute good, this is known as demand. The general rule in supply in demand is the higher the price the lower the demand, the lower the price the greater demand. Supply is dependent on pricing, most likely if price will increase, companies will increase the supply to match the opportunity cost of not being the market. There are many other factors that affect supply and demand besides price and cost. These factors are taxations, government tariffs and regulations, wages, cultural trends, geographic conditions, and economic conditions.
In the article written by Mary Williams Walsh, “Social Security to See Payout Exceed Pay-In This Year, posted in The New York Times, discusses the supply and demand of Social Security money and the
