After Google-ing " Economics in every day life" for the past 30 minutes, I got a text message about spring break. It then hit me, in a round about way, I can relate my upcoming Spring Break to Econ 501. ( No not because of how much fun Econ 501 is.)
When my friends and I began to plan Spring Break back in December, I was the last person of 11 who decided he was going. The place we going is apparently stringent on not packing the rooms, so we were going to get a bunch of 2 person rooms for the week. For you non-math majors, 11 is an odd number, and I was stuck. After a bit of deliberating, I decided the value of the trip was worth paying the higher price of the room without a roommate. A few weeks passed and I got a phone call from one of my friends who was not joining us on the trip. Basically, he decided he wanted to go, and wanted to know if he could split my room with me. I was pretty pleased. The guy who I am rooming with is one of my better friends and I am glad he is going. Also, my room price just got slashed in half.
According to Wikipedia, a consumer surplus can be defined as "the amount that consumers benefit by being able to purchase a product for a price that is less than they would be willing to pay." In simpler terms, by another person joining my room, the price I pay will decrease. Since I was willing to pay much more for the room, and am now paying much less, I have benefited. While my consumer surplus was not realized until a few months after the original purchase, it is now there. I understand this may not be a textbook example of a consumer surplus, but in a round about way, it fits the definition.
-Ryan
Subscribe to:
Post Comments (Atom)
Ryan,
ReplyDeleteThat is a very interesting example. It is somewhat hard to find economics in everyday life but that makes me think of something as well. I was out with some friends one time and i got really sick from food poisoning earlier that day. For those of you who dont know this, do not eat food off of street vendors in China...you may end up being sick for what seems the rest of your life. Anyways, my friends and i had just got to this Chinese bar/restaurant and were all excited to go. When i ended up being sick, i was willing to pay any taxi amount to get home where i could crash and go to sleep. The Taxi ride would have been really expensive because i was by myself and did not have anyone to split it with...but at that point, i just needed to get to a bathroom. Well, it turned out that my friend felt bad for me and said she would ride the cab back with me. She ended up paying for the taxi (great friend) and i experienced a consumer surplus. I was willing to pay a million dollars to get back to my room, yet i ended up paying nothing because of a generous friend.
So I also have an example of how this concept worked into my life. When I was younger, I was obsessed with the Spice Girls. My friends and I thought they were so cool. We used to put on fake concerts in my friend’s basement, ok enough of that; this is how it relates to what you were talking about. The Spice Girls decided to come to Columbus, and my friends and I would have given anything to go. We checked the tickets and were more than willing to pay any amount to see our first Spice Girl concert. It turns out we didn’t have to pay a dime. My friend won a couple tickets through a radio station contest, so we got to go for free. But, like I said, we would have given anything to go, so the fact that we got to go for free was just an added bonus. Oh, and the concert was amazing!!
ReplyDeleteA few years ago my roommate and I went shopping at Kenwood Towne Centre in Cincinnati. While at Macy's, I saw a shirt we both loved. Too bad the only size left was mine and not my friends, so I was the only one that bought the shirt for $60, even though she was willing to pay $60 also. Two months later, my roommate was at a thrift store when she saw the same exact shirt, with the tag still on and it was the right size for her! And she bought it for $2!!! At which point, she experienced a consumer surplus of $58! And I was angry I paid $60 =(
ReplyDelete