Assignment 1: Impact of Economics on Daily Living

Due: Week 4
Points: 105

Skill(s) Being Assessed: Problem Solving

• Criteria for Success: In this assignment, you will:
• Identify a relevant economic concept and describe how it applies to the scenario.
• Summarize the change in expenditures between budgets.
• Record the ways in which economic trends impacted personal income and consumer prices.
• Explain the rationale for budget decisions made in response to economic changes.
• Explain an additional economic trend or change from within the last year and how it has impacted your personal life and finances.

What to submit/deliverables: A completed Assignment 1 template, in Word document form.

What is the value of doing this assignment? Economic trends and events in the world have real impacts on your daily life. This could take the form of a new technology that increases the demand for workers in a certain field, the amount of economic growth for a country affecting the ability (or willingness) of employers to increase wages, or even trade decisions between two countries that cause price of some everyday goods to fluctuate.

Economic impacts require you to make decisions on how to allocate resources and effectively budget, and use critical thinking strategies to help you navigate the world of finance and economics. Throughout the previous weeks of this course, you have learned foundational economic concepts, basic personal finance considerations, and problem solving strategies. In this assignment, you will apply all of these to help a friend communicate her budgeting decisions to her family.

Your goal for this assignment is to: Build your problem solving skill by articulating how economics have real impacts on families and their budgets. You will apply decision making and critical thinking strategies to explain how economics impacts a friend’s personal budget decisions.

Steps to complete: In Week 4, submit your assignment in BlackBoard by following these steps:

STEP 1:Read the scenario in the Assignment 1 Template and preview the questions that follow.

Scenario: A friend who knows that you are learning problem solving skills and economics has come to you for advice. At the beginning of this year, rent and the price of imported food rose. At the same time, prices for domestic food dropped. The family’s income stayed the same, but because of these economic changes, they had to make changes to their yearly budget.
Your friend’s family is unhappy about the lifestyle changes that your friend has chosen. Your friend knows that you are studying personal finance and have asked you how to explain to her family what has happened to their spending. She has brought with her their family budget from last year, as well as their current budget for this year.

STEP 2: Identify one relevant economic concept that applies to the scenario and describe how it applies. (Question 1)

STEP 3: Summarize how expenditures changed between budgets. Make sure to address how expenditures changed (or did not change). (Question 2)

STEP 4: Describe the economic trends that created the need for a change in expenditures. Make connections to the economic concepts you have learned. (Question 3)

STEP 5: Explain the rationale for your friend’s budget decisions to her family. Address all changes (or non-changes) in expenditures and discuss long term effects. (Question 4)

STEP 6: Reflect on how changes in economic variables may impact your personal life and finances. (Question 5)

STEP 7: After completing all questions in the Assignment 1 Template, save your responses as a Word document titled: Your Name, ECO110_Assignment 1 Economic Impacts and upload to BlackBoard in Week 4. Make sure to also review the scoring rubric before submitting.