What I learned this Semester

Formal learning offers one the opportunity to grasp various concepts concerning the course in which such persons are undertaking in college. Like many other experiences as a leaner, this semester has added considerable value to my stock of knowledge as an individual. When one acquires new knowledge, such individuals not only develop professionally but also access vital information which is crucial to their interpretation of their daily experiences. No other learning experience has offered me such helpful information about the everyday experiences more than the microeconomics course that I have undertaken during this semester. Throughout the semester, I have acquired considerable knowledge about economics, including the relationship between concepts scarcity and choice with demand and supply; consumer choices and incomes; theory of the firm; and how economic activities affect various aspects of human life.

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After being taken through the introduction of the whole concept of economics, learning about scarcity and choice was an informative experience. From the onset, economics as was presented as an attempt to make an efficient allocation of available resources to satisfy human needs and wants. From an economic viewpoint, resources can never 'enough' hence the need for one to make a decision on where to use 'meager' resources (land, labor, capital and entrepreneurship) to obtain the best returns. As such, the best choice must be made under such circumstances. These resources are affected by forces of supply and demand. An intriguing concept that captured my attention in this unit is the definition of scarcity- the idea does not imply shortage or poverty. It is all about lack of insufficient resources to satisfy the needs and wants of people. The explanation helped get a deeper understanding of the concept of economics thereby erasing some of the assumptions I had that is all about shortages and using the money. However, I must admit that I had to put a little more effort to grasp a full understanding of these concepts.

Having learned about the concepts of supply and demand, it becomes more comfortable for me to learn about how such market forces affect the choices and incomes of consumers. In other words, the unit concentrated on how the availability of resources affects the choices and preferences of the consumers as influenced by their incomes. Essential concepts that were covered include purchasing power and real income. The purchasing power denotes the value of money that can be used to purchase goods or services. It can go up or fall depending on how the price of products moves. For instance, an increase in the price of goods reduces the purchasing power of consumers if their incomes remain constant hence such decline would affect their choice of goods or services. The money that is available to make the actual purchases is what I learned as real income. This is an area where I had little information about and, therefore, learning the concept helped me how the value of money falls when there is an increase in prices. Overall, it enabled me to link the supply and demand of goods with the consumer choices. However, acquiring knowledge about rent stood out as the most surprising about the unit.

I term the definition of rent as most informative and surprising because it never met my understanding of the term. While my understanding took rent as payment for the use of land or building, the unit described rent as payment as a payment made as a result of using a given resource. The new perspective enabled me to understand that rent is another term for the various payment made by businesses as compensation to those who gave them resources such as capital to advance their businesses. Therefore, learning that payment of interest may constitute as rent was quite interesting.

The theory about the firm was also another area that the course for this semester allowed me to learn. One of the notable aspects of the life of the firm is that profit is its principal reason for its existence. Therefore, managers of firms always make deliberate efforts to reduce costs as much possible to increase the profit margins. In the effort to reduce the costs, firms often use technology to foster efficiency. The role of technology in cost management opened some perspective on why many organizations engage in innovation as a strategy of cutting down on their costs. As a consequence, it became clear to me that the cost is the only factor that affects the profitability of a firm. However, further readings revealed some information I did know before.

What I discovered is that the type of market a firm operates is equally significant in affecting such a firm's profitability. One of the markets covered is the perfect competition market. Information obtained from the course indicates that in a perfectly competitive market, there is almost nil restriction against the entry of new firms. Admission of new firms in an industry has the consequence of making profits to go down as many players create competition which affects the price. That is to say, in such a market, a firm's actions cannot influence price. Instead, the firm will make every effort to offer its goods or services at the prevailing rates. In this respect, I have been made aware that operating under the highlighted climate can reduce profits.

On the other hand, a business organization operating in a monopoly market can dictate profits. If a firm operates in this market, I learned that it is the single supplier of a good or service and this can affect its earnings. The monopoly is often created by regulatory agencies either to protect the interests of the public or other businesses. I consider such information necessary for my understanding of economics as it builds on the idea of government participation in the economy.

The last lesson learned during the semester dealt with factors that make the business make certain decisions with a view of maximizing their revenues while enhancing the welfare of the people. First, businesses must make decisions that reduce the cost of the workforce. Given the cost minimization profit objective, some firms can decide to outsource depending on the value of such a strategy on the firm's performance. In making these decisions, businesses are often conscious of their efforts on poverty, incomes and healthcare. On the same note, I learned that business decisions are made based on their ability to promote sustainable development. These decisions include adopting policies foster environmental sustainability. This is a new phenomenon in the business sector, and it is meant to reduce the social costs of business operations. A noteworthy example of the operation of such a concept is a corporate social responsibility.

On the whole, the content of the semester enabled me to learn about the concept of economics and how individuals and firms make decisions to fit in a given economic context. The concepts learned include scarcity and choice and how such economic standards influence the consumption and production of goods and services. Notably, scarcity affects demand and supply which, in turn, affects the profitability of firms and incomes of individuals. Since businesses operate within a given social context, they are often drawn into issues such as poverty, healthcare and environmental sustainability. The new development is based on the premise that a business exists within the context of a wider society. As such, a better society means a better environment for the business to thrive. I owe such valuable information to the content covered in this semester.