I am writing to you to tell you about this amazing book that I had to read for my econ class. The amazing and easily understood book Cocktail Party economics highlights the concepts of economics, bringing them to light in a simple way without taking away from the importance of each theory and thought. This book was written to engage all readers and interest them in the book through an economic thought process that opens your mind to the many confusing things around economics.
The CPE book is easier understood by the youth and entertains the young audience more than other readers as it is put in a silly, sarcastic and informative form of writing. This book has not only made it easier for me to relate economics to my day to day life, but also made it possible for me to improve my knowledge on this specific subject. Also useful when trying to remember a question on an exam. For example, if it is demand or supply question, with her examples relating to life to life examples, it is easy to remember which is which.
Between the chapters one to four, I have found scarcity an interesting topic to talk about. Scarcity is easily explained as the depletion of supply or shortage within a specific economy. To easily understand the topic of supply and demand, shortage (scarcity) walks among one of the most used terms when referring to it. It is important to remember that thanks to scarcity, opportunity costs comes into effect which is the means to have the potentional loss gain from other alternatives when one alternative is chosen.
Throughtout the wirintg of Adomait and Maranta this concept is spoken upon: ” First, the resources on earth are now relatively scare and have an opportunity cost associated with them. Second, each category of resources called its opportunity costs or price by its own special name. Furthermore, inputs are typically sold in markets and as the level of scarcity changes, so do their price” (page 39). This quote can and does explain the importance of these terms used and lets readers understand easily and fully on how these terms are applied to real life sconomy. Not only is scarcity an important topic but so is the idea of supply and demand. Aside from scarcity, there is also a close relationship with the concept of Supply and Demand. Throughout these first four chapters, the concept of Supply and Demand becomes clear through examples and the clarity that Adomait and Maranta paint throughout their writing. Out of all the theories, this one is clearly the most important one as its an umbrella term that basically covers every economic transaction that takes place in our business world.
As this amazing book moves into the next set of chapters, more important economic ideas arise. Out of these unlimted topics to choose from, there are a few that stand out as cruical for you as a new reader of an economics novel. The understanding of the seperation yet close relartionship that Supply and demand have together is a concept that rounds the economy together as a whole. THroughout the reading, this concept is compared to the comparison of Mini Golf and the game of Golf in enterily. Although you may have the fundamental principles of mini golf, those skills don’t necessarily mean they will directly transfer to the full game of golf. Although similar, they do have a strong correlation together. The elements of this concept in terms of econmics is described through the understanding of scarce resources and utlilzing scarce resources with the lowest oppurtunity cost ensures effeciency within the market. This entails a fluctuation and mivemnet along the supply/demnad curve depending on the persoective you have. This flucation and mocement along the supply and demad curve are essiential and a postive concept for a growing economy. Another key element talked about thorughout this section of chapters, is the concept of Comparative Advantge and how it applies to our econmy today. The concept of Comparative advantage hilghlights an economics ability to produce goods and services at a lower opportunity cost theen that of trade partners. This is an important concept that is explored in this novel and enables the reader to recieve an understanding of the different degrees of comparative advantage. This concept also includes the understanding that products utilize scare resources with the lowest opportunity cost you are utilizing the comparative advantage.
Moving along into the third and last part of this incredible book, we reach a few of the final concepts to tie the concept of Macroeconomics together as a whole. Efficiency and Market Power are the last two concepts to wrap the book together. Firstly, the topic of efficiency is important to the complete understanding of all topics within economics. Efficiency refers to the “state in which every resource is optimally allocated to serve each individual or entity in the best way possible while minimizing waste and inefficiency. When an economy is economically efficient, any changes made to assist one entity would harm another.” The reason this concept is so important to the understanding of economics is understanding when a market is efficient and hwen ut is producing inefficiently because this discrepancy is crucial to the production and the overall economy as a whole. This concept is obvious because as a company, you would strive to have your production to be efficient whereas inefficiency is clearly not ideal. The second final point is the different market power and how it applies to the economy and all the individual markets within the economy. Market power can be explained as “the ability of a firm to raise and maintain price above the level that would prevail under competition”. This ultimately leads to reduced output and loss of economics welfare for the company.
In conclusion to this knowledge filled book, I have learned a lot of well known terms related to economics and was easily understood through all the writers examples that brought the book alive with useful life to life examples. Every term that was spoken about in the book are very important to having a smooth running economy or stable market to live in. If you are pleased by what I have mentioned in this letter, feel free to get a copy of this book and enjoy a good read. Thank you so much for listening to what I had to say today and hope you are doing well.
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