Course Eco 10: Microeconomics, Economic Law Applied In The Transaction

Economics Case Study Analysis
* Economic Law applied in the transaction
In this particular case study, barter trade was the law that was used in the process of making this transaction a success. Barter trade refers to the exchange of goods and services by parties that are involved. Parties that are involved in this business are Mike and Abdul while products that are being exchanged include games and books (Milani, 2009). Mike has a total of 20 comic books but lacks games that can be played to make him happy. On the other hand, Abdul has 10 games but there are no comic books to be read on his part. In this case therefore, there is a demand and shortage on each part and the need must be met if at all they have to be happy at the same time. Mike gives Abdul 6 of his comic books while Abdul gives him 3 of his games in what is seen as a move to ensure that there is a balance among the two. In the end, this is a transaction that satisfies parties that are involved in the process. This is the exchange of goods and services under the barter trade in order to meet certain needs.
* Commodity bundle after the trade
In economics, commodity bundle can be termed as all goods that are being traded in the market. In this case, Abdul and Mike have products that they are trading in the market and therefore ready to transact. Initially, Mike had 20 comic books while Abdul had 10 games. During the process of transacting, there are a number of changes that occur and in the end, there is new commodity bundle that emerges. In the new bundle, there is a a mixture of commodities unlike earlier when it was uniform. Mike has 14 comic books and 3 games. On the other hand, Abdul has a total of 6 comic books and 7 games. This is a representation of the new commodity bundle after the trading has taken place. A commodity bundle is always defined as a unit of the product that is on sale.
* Opportunity cost
In terms of economics, opportunity cost can be defined as a loss or a cost that has to be incurred in order for another benefit or alternative to be realized. To fulfil our needs and get products or services, there is a certain level of los...