Blog Post 1

Intro: I am going to be talking about a time in my life when I had to make a major economical decision and what factors played a role in my decision. When deciding to buy an item, you have to think about the benefits you'll get out of it and what you lose from it as well. In the following paragraphs, I will explain how I bought my first car and what my opportunity cost for it was, as well as what my budget was at the time.

Paragraph 1: When I was 17, I was already looking into buying my first car. I wasn't really sure what kind of car I wanted, all I knew was that I wanted a sporty fast type of car. Of course I knew these type of cars were expensive, so I had to carefully think about it. I had saved up $8000 dollars from working with my dad, and was constantly visiting dealerships to view cars. I tested a 2004 Nissan Altima that was selling for $3500. Everything worked with this car and was very economic on gas. However, I was looking for a sporty car that was fast. I tested a 2007 Dodge Charger that was how I wanted it, fast and awesome! The issue with it was that it was selling for $7000, twice as much as the Nissan Altima. I now had to make a choice between an economic car, or the expensive car I wanted.

Paragraph 2: I analyzed several aspects of the situation such as what would be my benefits if I bought the Altima or what my opportunity cost would be if I bought the Charger. The opportunity cost of buying the Charger were that I would be giving up twice the amount of money if I bought it, and would be left with only $1000. However, if I bought the Altima, I would have several money left over and could buy several items as well. Like I said before though, I was willing to pay more for a car that I really wanted instead of paying half for a car that I only wanted because it was Economic. 

Paragraph 3: The budget constraint of buying the Charger was something I had to think about, since I was only going to be left with $1000 left for me. I enjoyed my car though and was happy with the decision I had made. Another factor that played a role in my decision was the Law of Diminishing Returns. I was sure I would get many benefits when I invested my money in buying my Charger, such as having a nice car and being able to finally drive myself wherever, as well as the fact that it was good on gas.

Conclusion: When buying an item or selling it, you have to think of the benefits it will bring you, the opportunity costs from choosing things, or simply the budget you have at the moment. It was a difficult choice to make when I saw that I would be paying double the amount if I bought the Charger instead of the Altima, but after analyzing these aspects, I was happy with the choice I made. It felt good to have bought something with my own money, and was really happy about it. That was one of the choices I made at a young age, and was my first big decision.