Catlett_ECO110_Week4Assignment (2)

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1 Week 4 Assignment Amelia Catlett ECO110 Professor Isaac Boring December 14, 2023

2 Impact of Economics on Daily Living Describe Budget Changes The expenditures that changed by increase were food and housing costs because prices for both now are more expensive than the previous year. Expenses that changed by decrease were savings, entertainment, and personal spending because they were able to make cut back in these areas to add to expenses, they were lacking in. Savings has decreased due to not having money left over that they could out towards their savings account. Expenditures that remained the same were health care, transportation, utilities, education, and cell phone. Describe an Economic Trend Charles and Ebony are affected by rising rent prices. Charles and Ebony rent an apartment but the cost of living in their area has been becoming more expensive. When they renewed their lease in January, their landlord said that their rent would be increasing. They also pay for air conditioning or heat dependant on the weather.(Soomo Learning, 1) Apply Economic Concepts Scarcity, Tradeoff Decisions, or Opportunity Costs Opportunity cost would be a good idea for Charles and Ebony's budget since they will both have good paying jobs at the hospital in their near future. They could both set up retirement accounts and let them collect interest until it comes time that they want to retire. If they did something like that then they would be able to live a very comfortable life. Supply and Demand When there is a demand for rental properties or food items and it exceeds supply then the price will go up. Same with jobs, if theres a high demand for certain jobs but low supply of workers then employers will increase wages.(Soomo Learning, 1) Compound Growth It's important to Charles and Ebony to set aside money for savings, but their interest rate is very low so they've been considering their options. Since they're trying to grow their savings, compound interest will help boost their saving power. Then by the second year it will increase again by their interest earned on their interest which is called compound growth. (Soomo Learning, 1) Offer Advice My budgeting advice for Charles and Ebony would be to first make a budget of all income, expenses, and surplus. It helps to have a visual of everything so you can stay ahead. Another thing I'd suggest would be save money in any areas possible when your buying things you need monthly. Check out the stores you shop at and see if they have a loyalty or rewards program you could sign up for which would give you access to deals, promotions, and coupons for saving

3 money when shopping at their store. Lastly, When you're doing your shopping trip pay attention to prices and buy generic or store brand items. These things add up and will save quite a bit of money. With the money saved add it to a savings or emergency account so if they encounter any financial problems later on they'll have something put away. Reflect on How Economics Affects You Within the past year prices on items and groceries have increased to the point where I can barely make it paycheck to paycheck. I've heard talk about how we're going to experience a recession in the near future and that really worries me. If it remains the same as it currently is now then I'd be able to make it financially, I would struggle but I could handle it. If it gets worse or this talk of a recession happens then I'd have a real issue financially.

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4 Sources 1. Soomo Learning. 2023. Taking Charge of Your Economic Future. https://www.webtexts.com

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