It’s a common misconception that economics is boring and too complex for the average person to understand. I remember speaking to my particularly talkative hairdresser about studying economics, to which she replied “I could never study that” and “It’s all just a bit confusing really”.  And while I don’t deny that economics can be challenging, I also believe that economics IS for everyone and that it can be applied to our daily lives much more than you might think.

Take choosing what to do on a Saturday afternoon, for example. You might decide to meet friends for lunch, but that means giving up the chance to watch your favourite TV show. In economics, this is called opportunity cost, which means that when you choose one thing, you’re giving up the next best alternative. Economists use this idea to analyse decisions on a much larger scale. For instance, when a government decides to spend more on healthcare, it might have to cut funding for education. Or when a government chooses to invest in improving roads, it might have to delay funding for expanding public transport. However, the same principle of opportunity cost applies on a small scale in our everyday decisions, even if we don’t realise it.

Imagine walking into a store and seeing a jacket marked down from £100 to £50. Suddenly, it feels like an incredible deal, even if you wouldn’t have considered buying it at £50 to begin with. This is anchoring bias, a concept from behavioural economics, which looks at how we fixate on the first piece of information we see—like the original price—and lets it shape how we judge value. Economists study anchoring to understand how it affects consumer behaviour, helping businesses set prices that feel more attractive. And we, as consumers, experience its effects every day, often without even noticing it.

Take eating chocolate, for example. The first piece might taste amazing, but by the fifth or sixth, the enjoyment starts to wear off. In economics, this is known as the diminishing marginal utility—the more of something we have, the less satisfaction we get from each additional unit. Economists use this concept to understand why people often prefer variety and why demand for a product may decrease as consumption increases. It also explains why companies introduce new flavours or limited-edition products to keep consumers interested. However, we experience diminishing marginal utility all the time, whether it’s scrolling through social media or playing your favourite game.

I hope you can see that economics isn’t just about numbers and theory: it’s something we experience every day. Whether it’s choosing what to watch or how governments spend billions, economics is constantly shaping our world in ways we don’t always notice.

If you're interested in learning more about economics, feel free to reach out to me or any economics teacher for further information.

James Orchard, Year 13