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How People Make Economic Decisions
David Livingston
ECO/212 Principles of Economics
University of Phoenix
November 29, 2010
Greg Czarnecki

Many people make economic decisions solely by how much the consumable good(s) will cost. The focal decision-making factor will consist of what price consumers are willing to pay for the goods or services. Through individual decision-making people respond to supply and demands for their needs and wants, in many cases businesses and the government will make a final decision on what and how many goods are to be sold, and at what prices the consumer will pay. In this paper I will give an example of a decision in which marginal benefits versus marginal costs are associated and how the marginal benefits and marginal costs are relative in the decision-making process. I will also explore if incentives would have led me to make a dissimilar decision and I will explore how the principles of economics influence consumer decision-making, interaction, and the workings of the economy.
My field of expertise is in commercial/retail tire management. Consumers come eager to purchase tires for many reasons such as low or bad tread wear, flats, and the never-ending seasonal changes. My job as a manager is to provide a service of selling and installing customer’s tires for a price. Many customers ask “What kind of tires would be best for my car,” and he or she wants the best price. The answer to the customers question would be, how far does the customer drive on a monthly basis, is the customer looking for good, better, or best in tires and does the customer have any preference in manufacturers. The customer’s response to my questions would give me an idea of the type of mileage rating the customer would require; the type of money the customer is looking to spend, and the right manufactured tire that falls into the customer’s price range. For instance, Michelin and Bridgestone are top tier tires, so they would be in the...

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