Chapter 1: Resource Usage and Opportunity Costs

The article:
http://ap.google.com/article/ALeqM5h5JRwPgiiw1s1OQ2nMg0svKpPEZwD939H3FG0

The value of gold in New York was briefly increased over $900 an ounce on Thursday, September 18th, 2008. The rapid increase in the price of this resource from Wednesday to Thursday was the largest one-day increase ever. Possibly the most important thing that resulted in this was the advantage the government took of this resource. The government recognized the opportunity to save their banks from the debt that has been following them for a while now. Although gold seemed to languish for a while, it recently proved to regain its valuable power. Not only did the gold help the government, it also helped investors, as they often find gold as a safe place to put their money. Another advantage is that the gold is known to hold a fairly consistent value, even over a long period of time..


My article is mostly about the government taking advantage of their resources to pay for their debts. This connects with two topics in the textbook. First of all, although the textbook talks about using resources to produce goods and services instead of paying debts, the similarity is that the government recognized this opportunity to take advantage of the resources. The natural resource, gold, is both abundant yet limited, and the government had to make a decision on how to use this resource. This ties into economics because a part of economics is about making decisions on using scarce resources. Secondly, because the government chose to invest their money in paying bank debts, opportunity costs appear. Some opportunity costs would be that the government is now unable to do other things with that gold or money.


My personal opinion on this article is quite positive. In my opinion, I found that the government acted quickly in investing their money towards the gold when the value boomed. This not only helped pay some of the banks’ debts, it also helped the country’s economy. Another part of me also felt that the banks shouldn’t have had to face such a great debt in the first place, and that if they didn’t have a debt upon them, the government could have used that gold for another important use. Ultimately, the country was quite lucky that such a prosperous event happened to them.