Introduction
Economics is a wide field of study, one that has produced many important and interesting theories on how society should operate. Depending on the economic conditions one finds themselves in, a variety of theories, mechanisms, and assumptions can be relied on. This includes potential explanations of the free market’s laws, regulations for business, management and leadership practices, and other considerations. What is important for a regular person is that many of the ideas proposed by economists can be applied in one’s everyday life. When an individual understands the laws of the market, they have the flexibility to make better choices and lead both their private and professional life with insight.
Furthermore, many of the considerations and ideas can be applied to the day-to-day struggles of an individual, such as budgeting. For this discussion, two major ideas from economics will be covered as they pertain to my own life decisions. Living as both an average consumer with concerns over spending and an employer of a company, I must take trends, statistics, correlations, and laws into account. I will explain how the concept of utility maximization is connected with my consumer behavior, and how it helps me to make purchasing decisions. Antitrust regulations, on the other hand, are an active part of my employer considerations. The main thesis of the paper is that economic concepts play a central part in enabling better decision-making and taking informed risks. By considering the best course of action through the view of an economic system, a capacity to plan also emerges.
Utility Maximization in Consumer Behavior
The concept of utility maximization is most widely used in economics and business decisions. At its core, it refers to the way decision-making processes can be optimized. When faced with limited resources, such as time, money, or manpower, organizations, and individuals must act within parameters that guarantee the most “utility”. The term utility, in this case, refers to any potential gain that is seen as the necessary outcome (“Utility maximization,” n.d.). For example, if a company is looking to improve its profits under a strict budget, its utility-maximized approach would be to focus on methods that produce the most profit. Similarly, if an individual is looking to purchase a home with comfort as their priority and a set amount of money, they would choose a home with the most comfort-centered amenities within their price range. For myself, the concept of utility maximization often comes into play in my daily life, especially when purchasing goods or services. To derive the most from what I have, I consider the options that are likely to bring me maximum value. This consideration actively affects my consumer decisions.
To understand this relationship, however, it is first necessary to discuss consumer behavior. The term consumer behavior refers to a variety of actions, attitudes, and views people express when engaging with the market (“What is consumer behavior? Mastering the arts,” n.d.). Many companies put effort into researching or influencing consumer behavior to improve sales. Packaging design, pricing, marketing, distribution, and all kinds of other considerations, down to a brand’s image are all tailored to attract the desired customer base (Hawkins et al., 2019). Understanding this is relevant to this discussion, because the actions of advertisers are partially responsible for my own purchasing decisions, and how I use utility maximization in decision-making. The primary use of this concept comes in buying groceries and daily necessities. In my decision-making, I prioritize the number of goods and their durability/longevity as my main concerns. This includes buying food on sale, choosing brands that are more affordable or present a better price-to-quantity ratio, and other considerations. As a whole, the principle of utility maximization aids me in properly setting priorities and working with a limited budget.
Antitrust Policy and Regulation in Employment
Antitrust policies and regulations refer to the combined practices of the government and its agencies to ensure the freedom of American markets. To allow each company to compete and participate in the economy fairly, specific policies dictate the proper rules of conduct organizations should follow (“Antitrust laws,” 2022). The exact interpretation of antitrust regulations remains dependent on courts, but their presence is seen as a measure of control. Mergers, collaborations, and other actions that might monopolize an industry are looked down upon, to help both consumers and other organizations (Miller & Rubin, 2022). Other acts of deliberately restraining trade are also prohibited and tightly controlled by the government. The potential punitive damages faced by companies attempting to ignore antitrust legislation are likely to severely financially damage an organization, combined with the damage to its reputation and name (“Antitrust laws,” 2022). As a result, the combined power of actual law and financial incentives helps American markets remain free.
These legislations act as a framework within which companies make their decisions and are a necessary part of every leader’s considerations. Taking the perspective of an employer, I also adhere to the restrictions provided by anti-trust policies, which guide my decisions in engaging with other businesses and managing the organization as a whole. According to recent articles, some companies have been charged with antitrust violations as a result of withholding pay from their workers, which was done in a deliberate effort to protect profits (Porter, 2022). To abide by these regulations and avoid legal issues, I strive to pay all employees their due wages and work fairly on the open market (Vaughan-Whitehead, 2019). Only by considering the well-being of all participants of a free market, including other companies and consumers is it possible to lead a socially-conscious organization. The needs of others and the continued prosperity of society are important to me, therefore, I abide by the restrictions presented by antitrust policies.
Conclusion
In conclusion, it can be said that economic regulations play a significant role in organizing my daily life, my decision-making, and my work ethic. To not only benefit me and others alike, but I also use principles taken from business thoughtfully and apply them to the considerations that present themselves. As an individual consumer, I consider the maximization of utility the core principle to abide by, one that leads to the best results with limited resources. Thinking about both the potential value of purchased goods and the financial cost they represent helps me make better decisions. Antitrust laws, similarly, act as a guiding force to help me be better informed as an employer. Considering the needs of others, the long-term prosperity and profits of the open market, and a deliberate rejection of monopolistic action stand at the center of my actions as an employer. This principle values prolonged success over temporary gains and helps both the organization and its workers. In this way, common economic principles show their value in my day-to-day life.
References
Hawkins, D. I., Mothersbaugh, D. L., & Kleiser, S. B. (2019). Consumer behavior: Building marketing strategy.
Miller, J., & Rubin, J. (2022). Wage fixing or flexing? Pay transparency laws create challenges.
Porter, E. (2022). A new legal tactic to protect workers’ pay. The New York Times – Breaking News, US News, World News and Videos.
The antitrust laws. (2022). Federal Trade Commission.
Utility maximization. (n.d.). Oxford Reference. Web.
Vaughan-Whitehead, D. (2019). Paying fair wages is part of sustainability. Robeco.
What is consumer behavior? Mastering the arts. (n.d.). Maryville Online.