Eco 5103 Economic Principles

2.a. Economic principles can be applied to about everything. Read this article [http://www.smh.com.au/comment/andrewleigh-adds-economics-to-dating-and-gets-a-love-match- 20140801-zzlvb.html] and summarize it succinctly. What are the key economic principles that you can discern. Enumerate them.

• Perfectly competitive market: Dating, producer and consumer ; people
• Choice : rational self interest, compare marginal benefit exceed marginal cost, enough information

According to Andrew Leigh 3 simple rules, we can found

• Unlimited wants and Scarcity : everyone wants to find a best one. However, as Leigh said “there is no perfect one match for you. So the recourse is scarcity. Then we need to make a rational choice in order to improve efficiency.
• In order to achieve the greatest satisfaction, we need to make a rational decision that based on enough information and research. Refer to Leigh`s “You won’t know how well suited you are to someone until you get to know them.” In this case, we need to found their interests and background.
• Scared resource: Time. Scarcity limits our options and necessitates choices. In this case, we don`t have enough time to collect information and make a great choice. However, “a decision based on limit information is better than no decision at all” , Therefore, we make difference choice based on circumstances/ constraints.
• Optimal Decision and Rational decision : : in this case, we call it “ optimal-stopping problem”, the problem with the dating scene is that we don`t have enough time and information to make a good decision, therefore, we need to stop our action, we need to compare  marginal benefit and cost, and the opportunity cost in order to get the best outcome (maximization of utility)
• Information should based on “ceteris paribus” assumption: as Leigh said, we can use internet dating services to produce higher productivity, however, the most of the information on internet (for example, the information on internet dating site) is false, we can`t make a rational decision based on those incorrect information.
• Specialisation: “That model was built on people who specialise in different things – homemaking and breadwinning – so they are likelier to be different kinds of people, with different interests.” Everyone are different, we should found our absolute advantage/ comparative advantage to sell ourselves.

• 2.b. Economic principles can be applied to about everything. Read this article [http://news.virginia.edu/content/economistsfind-rare-empirical-evidence-love-unique-marriage-survey] and summarize it succinctly. What are the key economic principles that you can discern. Enumerate them.