The snow effect

Ive been stressing for nothing lastnite. all the "oh i cant sleep" act. All for nothing BECAUSE the exam is now cancelled.

And no, the title is not an economic term whatsoever. haha the exam is cancelled due to the snow. Heavy snow + No transport + Uni closed = No exam.

Mixed emotions from my friends. Some celebrated joyfully at the sound of the news, some cursing! Well as for me, i have mixed feelings. But mostly, i am cursing. All the late night studying, the crazy consumption of coffee, the pimply face..all those i will have to go through it again next semester when they decide to replace the test.

So, I've concocted a new term. The snow effect. Its when you thought something amazing is going on (making snowman n all) only to realize that the adverse effects is for a longer term (like being couped up in ur room with no means of going anywhere).

Opportunity Cost

Ok so yesterday i end up sleeping at 6am. Although i was in bed around 4.30am. I think im suffering from insomnia.

So anyway, imma talk about opportunity cost today. For newbies (im a newbie too but maybe a lil advance hehe) or non economic students, you might say "wth is this opportunity cost? Sounds boring and uninteresting" Little that you know, opportunity cost occur in your everyday life.

Ok imagine this, its after the festive season and you've gained a few kilos so you decided to go on a diet. But you then have this craving for chocolate cake. So you go to the bakery, and there's 2 types of chocolate cakes on offer. One is the rich, moist, exquisite and 100% fattening chocolate fudge cake. The other is a chocolate cake as well, but this is low in fat, with oats in it (yuck?).

So you weigh the options, if you get the first chocolate cake, you will fulfill your cravings for chocolate cake and with every bite, you will feel the orgasmic explosion at the expense of gaining another 100 kilos (exageration intended :p). If you get the second chocolate cake, you will likely keep ur weight under control at the expense of eating a less than delicious cake and not fulfilling your cravings. Decisions decisions...

After a loooooong deliberation, you think "owh screw the diet, im getting my self the all fat chocolate fudge cake" Here, you are applying opportunity cost. The opportunity cost of buying the fat cake is being able to keep your weight under control. So by buying the fat cake, you are foregoing your diet.

So THAT my friends, is opportunity cost. Basically it relates to decision. If you decide on A, then the opportunity cost is the benefit that you will get from B. Pretty simple huh?

Hope this helps, until we meet again..toodles~ :)

CANT SLEEP!

Ok so i cant sleep. The reason being, I HAVE AN EXAM ON MONDAY! Not just any exams, but economics exam.

Damn it. Ok so im not a pro in economics. Hey ive been studying it for a mere 3 months. Actually i have a law background. But law...errr not for me. No offence to my lawyer friends, i still love u guys. hehe. Im currently doing my MSc in International Business Economics and as a master student, i have to learn micro and macro in one short semester. Great huh??

But yeah i would like to be an economist someday. Maybe another Dr Doom. If you dont know who Dr. Doom is, well have a look here. But first i really need a deep understanding of the subject. And thats the point of this blog anyway. So any help from anyone would be highly appreciated. haha sounds like an official letter.

I guess i better sleep now, or study? owh well, sleep sounds better even if i cant. Nite! :)

The Basics: What drives us to buy buy buy??

I hate making impulse purchases. Because of that I have a habit of surveying each and every shop in common to make sure that I buy the cheapest woolen sweater offered. Although in the end I'd end up not buying anything because I was too tired to go back to the 2nd shop which offered the lowest price.

Admit it or not, generally we like cheap items. Or cheap-ER items. Primark any day. However the price tag is not the only factor of purchasing an item. So what are they then?

1. Price of substitutes - You LOVE MNG. However, a black tank top at MNG has the same quality as a black tank top in PRIMARK. This means that the tank top at PRIMARK is a substitute to MNG's. The only difference is that the one in MNG cost $10 more than it does at PRIMARK. Which do u choose?
2. Price of complements - Lets say that you're thinking of buying the GHD hair straightener which cost $100. Well of course if you buy this, u have to buy a heat protector serum as well or else u'll end up frying your hair. But then by a stroke of badluck, the price of the GHD suddenly goes up to $200 and you decided not to buy it. You wouldn't buy the serum as well would you?? The serum and straightener complement each other. So when one price goes up and you decide not to purchase it, you are not likely going to spend on the other. However, some people do..just because.
3. Our income - When we are students, thrift shops and carboot sales was our world. In economics, they call the items sold at these kind of places as inferior goods. The normal goods are those High Street brands such as Zara and Topshop. The demand for inferior goods were high during those university years while demand for normal goods were low. However as we graduate and earn more income, a shift in demand happens and now we find ourselves walking down the high street more often than strolling at a carboot sale, if ever.
4. Tastes and preference - Well this is straightforward actually - you buy it coz you love it. However this might change with time. Fashion is an obvious example. What is fashionable this year will be out of fashion next year. Think of skinny jeans for example. One day you might look back and think " what was I thinking buying THAT??" lol!
5. Price expectation - If you expect price to fall in the future, then it may be wise to wait and delay your purchase. For example, the recently launched iphone 4. one word:EXPENSIVE! However rumour has it that the new iphone 5 will be out in June 2011. By that time the price of iphone 4 will drop. Unless you are really into cutting edge technology, it might be wise to wait dont you think?

What all these tell us is that we do have a choice. The Christmas sale is coming up and it might be good to plan ur shopping. Ask yourself questions like "Do i really need this although it is cheap as hell?" "Can't I just wait for a few weeks til sale?" "Why buy this when the other is much cheaper?" . On that note, PURCHASE WISELY PEOPLE! :D

Introduction

This blog is dedicated to girls just like me who wants to understand why there is such a thing as 80% reduction at Topshop or why a buy one free one lipstick is on offer although it seems too good to be true. It doesn't matter if u are a shopaholic or simply a seasonal shopper. By understanding why the marketplace works the way it does will make you aware that the dress you just bought for $5 might not be the greatest bargain after all :)