Ch.1: Understanding Opportunity Cost When Investing In Property

http://ezinearticles.com/?Understanding-Opportunity-Cost-When-Investing-In-Property&id=21534

This article is basically telling us that when you are investing in property, there are economic factors in play. The most important factor is opportunity costs and that is what the article explains. This article states that most people get involved in property investing because they understand the opportunity to make money and be successful. But with these opportunities you also may loose a lot of stuff. This article tells us that if people are not fully aware of the opportunity costs then it may hurt them if they invest in property.
This article also tells us the meaning of opportunity costs which is the value of the best possible alternative that is given up in the decision to use a resource. For example, “If a city decides to build a hospital on vacant land that it owns, the opportunity cost is some other thing that might have been done with the land and construction funds instead. In building the hospital, the city has forgone the opportunity to build a sporting center on that land, or a parking lot, or the ability to sell the land to reduce the city's debt, and so on.”
The article relates to the chapter because this chapter focuses on opportunity costs and how important it is in making decisions. We use opportunity costs a lot in everyday life and for property investment it is the same idea. When investing into houses you must think of the situation that you are in and what decision you will make. Also, opportunity costs state what you are giving up in order to obtain that goal and direct costs state how much it will cost in doing this. The total is adding opportunity and direct costs to see if it is worth doing. In this case, the situation would be is it worth investing into houses? Also, this article tells us that if something is bought low, it should be sold high in order to be a successful seller.
My personal reflection on this article is that it is useful in understanding how opportunity costs relate to investing in property. Also, it clearly states the main points and has great examples that relate to the topic sentence which all relate to the chapter.

Ch.2: Gas Prices Fact or Fiction: A Primer on Supply and Demand

http://www.mises.org/story/1936

This article is very well written and has many smart economic thoughts. The question throughout this article is why gas prices are so high are and what is making them go even higher? This intriguing question might have been wondered about by many people. Tom Lehman is the person who wrote the article and he said, “The only reasonable answer to this question involves supply and demand.” Supply and demand are very important things that we learn in everyday economics. This is what the article basically explains and clearly tells us.

First, just incase you didn’t know, demand is a desire that buyers have towards various goods and services that they are willing and able to purchase. Supply on the other hand is the quantity of goods and services that sellers are willing and able to supply, to the market. Some important things that Tom Lehman points out in this article is that there is a loose connection between the world price of crude oil and the price of gasoline, and the rising price of crude oil in recent years can partially explain the rise in gasoline prices. This is very significant towards finding why gas prices are high because it tells us that crude oil is apart of it. Also, through the graphs from the article I figured out that the patterns of crude oil and gasoline increase and decline at similar paces.

This article tells us that markets don’t work fine under normal circumstances and fail under crisis situations. Government doesn’t regulate prices and impose price controls during a crisis (such as after a hurricane) to stabilize markets. Instead, the national disaster emergency association takes control of these issues. Lehman says, “We experienced this when hurricane Rita hit and the government couldn’t find any solutions to all the problems and one of them was oil.” This resulted in many gas stations in the Gulf to raise their prices because of demand and that left people horrified.

This article also tells us that when the demand of oil goes up like during hurricane Rita the supply goes down. This causes oil prices to raise and people getting mad. Lehman says, “There certainly are rational reasons why the price at the pump jumps immediately when some change occurs in the global oil and gas markets, and the laws of supply and demand do a good job of explaining this connection.”

Lehman said during this article that fuel conservation calls for less driving by a jawboning president are unnecessary and unwelcome. This is true because we get angry at these people and the government.

This article relates to the chapter because we talk a lot about how supply and demand effect things like oil prices. This article is all about oil prices and how supply and demand changes it. All these topics and ideas are very relevant to the chapter which is named the operation of a market.

I personally think that oil prices actually do involve crude oil and that helps us conclude the prices of oil at a certain time. For example, crude oil must cost a lot because gas prices are really high right now. This article is very good in explaining how supply and demand works and it shows precise examples of each. All in all, it was a great article written by Tom Lehman and I enjoyed reading and learning from it.