dinner party econ PDF

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T.A Hello Robert, Hello Robert, I have recently finished reading a novel for my economics class at university, it’s called Cocktail Party Economics, which has been written by my well educated and a very successful economist Eveline J. Adomait and her colleague Richard Maranta. In the novel it goes over several topics that help reader and or entrepreneurs like you and I have a better understanding of the economic world and the ideas and problems that may occur in the economy. This novel really expresses the inner workings of markets and how they work while showing what key aspects are needed to be successful in the market in this growing economy. Knowing you’re interest in entrepreneurship and economics, I feel that this book derives multiple aspects of the workings on the economy that may help expand your knowledge and Interest in economics. To be exact 3 concepts spoken about in the book: put your money where your mouth is, production in markets around the world. These ideas help your understanding on how economics work. The given idea of “put your money where your mouth is”, This idea generally means you want someone to spend money to improve a negative situation, instead of just talking about improving it, you try to do something about it. This relates to me because, in the market it is important to understand you can’t succeed without having informed factors to back up your mindset. This seems to me as an essential tactic in the business world. Knowing that you are a young entrepreneur I feel like this topic is more gravitating to you. Since entrepreneurs like you and I, we must find goods that customers would see as necessity, at an adequate price for the good. That plays into the idea of “put your money where your mouth is” the reasoning behind that is because very few customers view all products as enough to each other. “A painting sold in a private deal sold for 140 million.” (p. 23). That just goes to shows you how one person valued this painting to such a high level that they are willing payed 140 million and would have bid much higher if there was reason too. Also, this portrays that the buyer considered this painting to be more valued than any other consumer, so they put their money where their mouth is and purchased the painting above all other potential buyers. Finally, I see this as a great idea because it displays what consumers values are for products at certain prices. Another example of putting

your money where your mouth is, would be saying I’m going to sign up for the gym tomorrow but then never actually doing it so by getting up and going your putting your money where your mouth is by signing up. I feel that this connects with you knowing that it should help guide you and show you that you need to decode the prime price for the demand attracted to product (market equilibrium). This method defines the idea of knowing the value of a good as a supplier. Another major topic talked about in this novel is Consumer behavior which all successful company’s/entrepreneurs understand and take in to account with all major decisions. Consumer behavior relates to me because in fact, I am interested in consumer psychology and the whole concept behind their behavior adjustments. Customers are people that buy goods that the companies sell, therefore; multiple firms research their trends to understand how to maintain their product is still receiving attention relevant in its market. With that said there is still multiple factors that play a role in consumer trends in the current market. “There are four main categories that can fundamentally shift consumer demand, 1. Consumer preference 2. Consumer Income 3. Prices of related products 4. The number of buyers in the market.” (p. 80-81). As shown in this quote consumer preference is a large factor in how companies’ market and portray their product, consumers commonly follow trends created by those with a high social presence commonly athletes, artists and those with a large social media following I would say I use social media advertising as a large factor of what I do purchase. Also with me another factor on what I spend my money on lets say is an article of clothing because that’s where most of my money goes, I will commonly buy something that I can style with my clothes. With that said I still try to find the most financially efficient option. Another factor that can shift a potential buyer to purchase your product is through marketing such as advertisements and commercials. Another component is consumer income, this can change how consumers spend their capital. Recessions strongly change how customers spend their money because the massive cut in their income which causes a massive crash in the demand for products that aren’t considered a necessity. This will ultimately make the producers pick a certain demographic for their products to have a steady sales pattern. Also, the Price and demand of a complementing product helps to guide the success of the product. For example, if the price of milk increases customers will try and products that don’t require milk, so cereal sales will most likely decrease. Also, certain goods may have substitutes in the market that effect the demand of the product, an example is if the price of coke were to randomly sky rocket the sales of Pepsi will increase since it is a substitute product of

coke. Another major factor is the number of customers in the because if they were to increases in that market. This will most likely cause the demand to increase in the market. Something you need to be able to comprehend as well is to understand the market is if there is a lot of competition between the sellers in the market of that product. Finally, you will need to investigate the trend to try and foresee if the product is going to be trending in the future or if it’s going to just be a niche. Eveline Adomait speaks about the two major economic laws which see over the production that takes place in the markets around the world (pp 54-55). The first law explains how an economic factor that the ability must make a certain product at a lower cost, also known as a comparative advantage. This is important because it gives firms the ability to sell goods and services at a lower price than its competitors and realize stronger sales margins. Let’s take clothing producing countries such as China, they have a comparative advantage in the production of clothing because the cost of the raw materials i.e. fabric being much cheaper also the cost of labor is much cheaper because of such a low minimum wage thus decreasing the opportunity cost. The other law explains absolute advantage meaning the ability to make certain at a lower cost, letting them to make larger quantities or use the leftover capital to improve the product overall. Personally, I found this obvious, because the fact – absolute advantage involves the ability of a country to produce a good more efficiently than other countries. An example of that being India since it has an absolute advantage in operating call centers compared to the Philippines because of its low cost of labor and large labor force.

The three ideas which I had discussed being. put your money where your mouth is, consumer behavior and production in markets around the world, I genuinely feel that they are a necessity to help to understand the economic world. I feel that I found this information valuable to me because in the constantly growing business world that gaining the knowledge such as consumer behavior and the mindset of putting money where your mouth is. This book is significant to me because it shows what you need to understand the economy and how it works this will also benefit me in the future and use it like a handbook of economics. Since they help decode the language of the economy to help you be profitable and reach your target audience in your specific market. I believe these ideas should help your economic goals and expand your knowledge of the industry.

Kind Regards...