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Accounting 2 video #1
The videos by Ninos Malek starts off by going over the the definition of economics which is the
study of human action and how we make exchanges given certain institutions. Economics isn't
the study of money, business or personal finance, which is what most people think.
Understanding economics will actually help make better financial decisions and investments that
can be applied to everyday life. We have unconsciously been participating in economics our
entire lives because we are constantly making choices and trades. Malek goes over the
definition of Opportunity Cost which is the highest valued alternative that you give up to do what
you are currently doing. In simpler words, it is the next best thing that you gave up. For
example, if you are at home doing homework, the next best thing you are giving up is hanging
out with friends, going out to the beach, ect. Malek also goes over Marginal Thinking which is
when thinking about whether or not to do something depending on the marginal benefit and
marginal cost of the the action. Normally someone does something when the marginal benefit is
higher than the marginal cost. Someone will stop doing something as soon as the marginal
benefit and the marginal cost are equal or the marginal cost becomes higher. In addition, Malek
describes scarcity as having unlimited wants but limited resources, therefore we have to make
choices and give up something in exchange for something else. For example, if you want to buy
a new car, you have to give up your money. Malek describes a good economist as a person
who looks at both the short and long term costs and benefits, not just the financially but in
general. He explains this using an example involving Katy Perry’s song “last friday night” and
the phrase “what happens in Vegas stays and Vegas”. This song and phrase refer to doing
things without caring about the long term consequences, which isn't a very smart thing to do.
Malek goes over the best time to do something. He explains this using a scenario at the club.
He says that if you go to a club with the intention to meet someone, it is not a good strategy to
make a move right away but you also shouldn't wait too long. He says that the best time to do
something is when the marginal cost is equal to the marginal benefit. He does a really go job at
explaining these economic terms using references that we can all relate to which makes them
