Different Economic Principles Across a Range of Different Goods We Need in our Lives

Application of Economics Name Institutional Affiliation Date In the above situation, the law of economics that is applicable is the subjective theory of value. In the theory, the value of a certain good is not determined by the properties that the good nor is it determined by the amount of labor that is used in the production of the good but rather the value of the good is determined by the perceived importance that an individual places on a certain good depending on the ability of the good to satisfy their needs (Brock, 2018). In the above situation both Mike and Abdul are bored of doing what they have been doing. Mike is bored reading comic books and he wants to get the games since he believes that if he plays the games, he will be happier. In their exchange, they were not guided on the price or the monetary value of each of their goods but they were focused on getting rid of boredom which can be observed as the need to satisfy their needs and that is the main reason that made them to exchange the books and comic books.
Also referred to as the market basket, the commodity bundle refers to the unit of the collection of a set of goods that are produced and sold in the world market and they are being tracked so as to monitor their fluctuating prices over time (Brock, 2018). In the above case study, after the exchange, the commodity bundle for Mike and Abdul will change. The commodity bundle of the comic books that Mike had would change to fourteen while the commodity bundle for games that Abdul had would change to three. The commodity bundle of goods is also related to the consumer basket which is the sample of goods and services that are offered at the consumer market. In the above situation, there would still be thirty different commodities that will still be in circulation. The price of the commodity goods in the case study would fluctuate over time depending on the different ways in which the people will perceive them to be more important. If people perceive and realize that the comic books are more important then their price would increase since their demand will be high. If the value of the games that Abdul has less demand, their price will certainly decrease since they are not in high demand. The commodity bundle plays a great role in determining the progress of the economic situation wen people trade different goods ov...