Every human rely on their economies to survive in their rough life either it will be good or vice versa. Microeconomics is a social science that investigates how the implication of the individual human action, pointedly by what method they will affect the utilization and distribution of scarce resources. Microeconomics also reveal how and why every goods or products have a particular worth especially for the human being, besides microeconomics also show how individuals will be more capable and make the more profitable decision along with how individuals best cooperate or comply with another person. Internally, the microeconomics subgroup such as buyers, sellers and the business owners that will make certain choices in this economics and microeconomics also study, what will happen when there is some innovation in the factors of production. So, the purpose of this reflective writing is it will expose the microeconomics application in the real world.
Each individual, families, firm, and government in this world will deal with economics problem, which is how they will make the best use of limited resources to satisfy their unlimited needs and wants. Next, scarcity refers to the state of being scarce or in short supply of resources when many people in this world have their own limitless wants. This case will require people to determine their decisions on how they will allocate the limited resources competently that will generate the good outcomes to satisfy their needs and wants. The scarcity problem in this world will burden some individuals that do not have any career also known as the jobless person and resultantly in increasing amount of jobless person because there is no space for them in any business industry. This situation is currently happening in Malaysia when The Sun Daily news reported that almost 50,000 Malaysia expected to be laid off this year. As a consequence, the families have to cut off their budget on daily basis because of this economic problems. Then, the firm did not have any choices because of their limited factors of production and will laid off their employees in order to save budget as well as make more profits.
The government resources also limited and this will make the government halt the cost that did not really give advantages to their people such as the cost for the ministry of sports. Besides that, the opportunity costs are also one of the economic problems that define the loss of other alternatives when one option is chosen. Opportunity costs also refer when a person give up the other item because they must to choose the substitute of this item that can give them more advantages and the cause of that, they will not know what the benefits of the other item that could they receive when they choose the best item. The individuals and families have to choose one of the items such as goods, products or services that can maximize their satisfaction and have to consider which goods will give them more benefits similarly in this situation will ought them to choose the magazines or sports shoes if they want to buy it. The firm also has their own opportunity costs that obligate them to make a choice between the items that they want to sell to the public.
For example, the firm has to choose either they want to produce television or radio and they will make the decision to supply the goods or services that maximize their profit along with the low costs. In the term of government, they have to choose among the welfare projects that well-being also can give more benefits to their people in the country. For example, the government has to choose either want to construct the school or build a hospital and the agreement to choose will based on which project can give more advantages to their people.
Tradeoff means that we have to give up the second best item unwillingly if we want to choose the best item and this economics problem also make us choose how to allocate our limited resources by making some trade-offs. For example, the individuals and families have to choose between time and money such as go out to dinner tonight or rather save their money so that they can go to the shopping mall tomorrow. Making decisions necessitate them to trade-off one item against another.
The firm also will face the same economics problem when they have to choose between the two products that they want to produce and has to concede the second best item if they want to choose the other item. For example, they have to trade-off the radio, if they want to sell the television. This economics problem also can affect government because it can force the government to make a decision to choose trade-off the second best project and choose the other development project for their people in the country. For example, the trade-off for the construction of hospital is the building the school project. There are also economic systems that refer the basic arrangements by how the limited resources such as goods and services will distribute within the society and also can trade goods and services between the countries all around the world in order to satisfy the individuals, families, firm and government needs and wants.
There are used to control the five factors of production and it will give the advantages to the individuals and families because they can live easier than before also can make more money. For example, the individuals have the opportunity to run their own business and become a successful entrepreneur because of this economic systems. The firm also will gain benefits by this economic systems because they can produce and sell the goods or services within the people in the country and of course it will increase their profit as well as reducing their loss. The economic systems will generate the planned economy for the countries and the government can look after their people problems in the country by giving them more advantages than before.
In a conclusion, the study of microeconomics exposes how the individuals, families, firm, and government make a financial decision in their own content. The individuals and families will become the consumers in this economy while the firm is the businesses that will produce goods and services also the government that make all decision based on the sake of their people. There are many other elements that influence financial decision making that can be simple or complex based on how they deal with it. The great lessons of microeconomics are how they make the decision that may be predicted with reasonable accuracy as consumers, businesses, and government that create the economic conditions in which we live nowadays.