Economics In Everyday LIfe


Published on

Published in: Lifestyle, Business

Economics In Everyday LIfe

  2. 2. Use Economic Concepts to explain the following questions.
  3. 3. QUESTION 1 <ul><li>Why do the keypad buttons on drive-up machines have Braille dots?? </li></ul>
  4. 4. ANSWER <ul><li>ATM producers have to make keypads with Braille dots for their walk-up machines anyway, and so it is cheaper to make all machines the same way </li></ul><ul><li>If the Braille dots caused trouble for sighted users, the extra expense might be justified. But they do not. </li></ul>
  5. 5. QUESTION 2 <ul><li>Why does a light come on when you open the refrigerator but not when you open the freezer? </li></ul>
  6. 6. POSSIBLE ANSWERS <ul><li>Most people open the fridge more than the freezer, thus placing a greater benefit on opening the refrigerator. </li></ul><ul><li>People Benefit More from having a light in the fridge than in the freezer. </li></ul>
  7. 7. Why are gas tanks on the driver’s side of some cars but on the passenger’s side of others? Question 4
  8. 9. <ul><li>Answer: </li></ul><ul><li>Gas lines would be longer. </li></ul>
  9. 10. Why do many fast food restaurants promise a free meal if you are not given a receipt at the time? purchase? Question 5
  10. 11. ANSWER <ul><li>To make sure cashiers do not steal. Sales are monitored when rung up. </li></ul><ul><li>It is cheaper to give a free meal than to hire supervisors to monitor a cashier all day </li></ul>
  11. 12. QUESTION 6 <ul><li>Why is milk sold in rectangular containers, while soft drinks are sold in round ones? </li></ul>
  12. 14. ANSWER <ul><li>Rectangular containers use shelf space more economically. </li></ul><ul><li>Soft drinks are consumed directly by the container, the extra cost is justified because it is easier to hold. </li></ul>
  13. 15. QUESTION 7 <ul><li>Gold sells for the same price in New York and London. </li></ul><ul><li>Why does an ounce of gold not sell for $800 in NY and $900 in London? </li></ul>
  14. 16. QUESTION 8 <ul><li>Cars in Europe have much smaller engines, usually no larger than 4 cylinders. </li></ul><ul><li>The BMW 5 series in Europe is usually 1.6 liters and 4 cyllinders, while in the US the smallest option availabe is a 3 liter, 6 cylinder engine. </li></ul>
  15. 17. ANSWER Gas is much more expensive in Europe due to higher gas taxes. Europe’s gas is up to 2X as expensive as the US Toyota’s new car
  16. 19. QUESTION 9 Why are child safety seats required in cars but not in airplanes?
  17. 20. ANSWER <ul><li>An extra seat may cost at least $1000 or more on a flight </li></ul><ul><li>As the father of three, I hate to admit it, but those extra seats would be very expensive! </li></ul><ul><li>Hold you kids tight on the plane, and hope for the best! </li></ul>
  18. 21. QUESTION 10 Why does an accident in the northbound lanes of traffic cause a traffic jam in the southbound lanes?
  19. 22. ANSWER <ul><li>Here is a simple cost-benefit calculation  The cost of slowing down to look close at the accident scene is that they will be delayed by several seconds. </li></ul><ul><li>The Benefit, by doing so, a driver will satisfy their curiosity. The benefit usually exceeds the cost for most drivers. </li></ul><ul><li>However, if everyone slows down, there could be a delay as long as 1 HOUR per driver! </li></ul>
  20. 23. QUESTION 11 <ul><li>Why do airlines charge much more for tickets purchased at the last minute while Broadway theaters follow the opposite practice? </li></ul>
  21. 24. ANSWER <ul><li>To buy at TKTS, you must wait about an hour or more. </li></ul><ul><li>Tickets are not often available for the most popular shows. </li></ul><ul><li>Many high-income people are unlikely to stand in line for an hour to save a few bucks. </li></ul>
  22. 25. QUESTION 11 <ul><li>Why do female models earn so much more than male models? </li></ul>
  23. 26. <ul><li>Supermodel Giselle made between 15 to 30 million dollars last year. No male model made more than ONE million! </li></ul>
  24. 27. ANSWER <ul><li>Women spend 2X as much on clothes as men. </li></ul><ul><li>Women widely read fashion magazines. Could you even name one Male fashion magazine? </li></ul><ul><li>Women who can capture the attention of a reader amongst the 1000’s of pictures are worth their weight in gold. </li></ul><ul><li>So it is easy to see why manufactures might be willing to bid a lot more for a model who stands out even slightly from the field. </li></ul><ul><li>DID YOU KNOW: The September, 2007 issue of Vouge has 727 pages of Ads! </li></ul>