Do you need this or any other assignment done for you from scratch?
We have qualified writers to help you.
We assure you a quality paper that is 100% free from plagiarism and AI.
You can choose either format of your choice ( Apa, Mla, Havard, Chicago, or any other)
NB: We do not resell your papers. Upon ordering, we do an original paper exclusively for you.
NB: All your data is kept safe from the public.
Introduction
In the broken window fallacy, we see the baker losing the window in which he has to part with some fifty dollars to repair it. This loss incurred by the baker turns out to be a gain by some glazier, thus boosting the glass business. This implies that a loss encountered by one party turns out to be a gain to some other party (Hazlitt, 1946).
However, the fifty dollars that are now to be spent on repairing the window would have been spent on something else and in this case, buying a suit. And since the resources are limited, the baker has to make a choice to forego buying a suit and spend the available amount of money, fifty dollars, on the window repair since this seems to come on top of the list of preferences.
But this choice of repairing the window will have to affect some other invisible party in a negative way. The tailor who had to sell the suit to the baker at a cost of fifty dollars will not be able to gain this amount of money. The breaking up of the window has affected him or her in a negative manner.
The Economic Terms
Resources
These are things that are required so as to survive or prosper or achieve a particular goal (Anon, Resource, 2009). These things are scarce and limited in their supply. Therefore, one has to come up with a list of preferences and make a choice on what to satisfy first and forego the rest. In the case of the broken window the baker has only fifty dollars to spend. He has to choose between repairing the window and buying a suit. But since repairing the window tends to be more important because he has to protect his commodities in the shop, he will have to chose this and forego buying the suit. This is because he has limited resources and he can not have the suit and at the same time repair the window.
Cost
This is what one has to give up in order to get a resource. Relating this to the case of the broken window, the cost of having the window repair is said to be fifty dollars. This is the same cost of buying a suit.
Opportunity cost
This is the value of what one can not be able to buy because he or she has bought something else (Anon, Economics: Opportunity cost, 2002). For instance, in the case of the broken window, the opportunity cost of buying a suit is the cost attached to repairing the window which is fifty dollars. The baker has to forego buying the suit and repair the window.
One of the five big ideas
Here we base on the first idea that suggests that choices involve tradeoffs and that choices are always made by giving up one thing in order to acquire the other (Anon, Basic terminology in Economics, n.d). In the case of the broken window , the baker has to give up buying a suit in order for him to have the window repaired. This comes about as a result of the scarcity of resources. Since the baker does not have adequate resources for him to have both the suit and the window repaired, he will have to come up with a list of preferences to chose between repairing the window and buying the suit.
At the moment, repairing the window calls for immediate action in order for him to protect his shop and therefore he will have to make this choice of repairing the window first and the suit will have to wait until some other future date (Hazlitt, 1946).
Current example of Henry Hazlitts ideas
The ideas given out by Henry Hazlitt are very much applicable in the current world. Whenever there is destruction, there are always those people who benefit from this destruction. For instance, there have always been cases of earthquakes and tsunamis occurring in various parts of the world. The people affected are not always prepared to have come up with a budget for the destruction associated with these calamities.
On the other hand, once these calamities come about, these people have no any other choice but to set up new buildings and carry out the repair of all the vital structures that enable them to lead a normal life. The resources that they had initially planned to employ in other undertakings are compulsorily devoted to the repair. This comes about as a result of the scarcity of resources and these resources are limited in supply. As much as the affected people undergo losses, the suppliers of the building materials and the construction workers benefit from this. The demand for the building materials go up and in turn triggers an increase in supply.
To conclude, in economics, people are always striving to satisfy their needs by using the available resources and these resources are limited. Therefore, the only option is for one to come up with a list of preferences in order to be able to know what need to satisfy first. So, this brings about the issue of one making choices.
Reference List
Anon. (N.d). Basic terminology in Economics. California: TUI University.
Anon. (2002). Economics: Opportunity cost. Web.
Anon. (2009). Resource. Web.
Hazlitt, H., (1946). Economics in one lesson. New York and London: Harper and Brothers.
Do you need this or any other assignment done for you from scratch?
We have qualified writers to help you.
We assure you a quality paper that is 100% free from plagiarism and AI.
You can choose either format of your choice ( Apa, Mla, Havard, Chicago, or any other)
NB: We do not resell your papers. Upon ordering, we do an original paper exclusively for you.
NB: All your data is kept safe from the public.