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chapter 22

I definitely think that what I found so interesting in this course was the demand and supply curves (as well as many of the other curves). I think that I found this the most interesting because of my limited experience with economics (I only took one class senior), and my teacher never really went over supply and demand curves. In my eyes economist were only these people who just told us to save money and earn more, and it isn’t until this class that I realized they look at a lot of data (the only difference between the class and actual economist they have to actually have to start from scratch, while I really just filled out boxes). The curves themselves I find interesting because I can now read a basic economics graph and tell you my thoughts. I would also like to note that I really liked studying free market environmentalism, because it gives me a new perspective on the whole environment (I should say it gives me a practical idea), the role of government, and how I as a private citizen can affect change productively. I also like that at a moments notice I can also say words like opportunity cost, marginal cost, moral hazard, etc. to just be a know it all. 

With asymmetric information and my shopping I use kind of the basis of practical knowledge. I, the buyer, am only willing to pay so much for a certain product. Now if it is a small purchase (relatively) I typically buy things that have high rating for the best cost (and typically if the seller has high reputation or recommendation). I take into account all of the available information and make a decision that way. If the product is used (like from a thrift shop), I determine the wear of a product, the price, the material (if needed), and sometimes the ability to haggle. I typically don’t by items in shifty settings (like asymmetric information).....Even with the car or house situations differ. With a house I would really want to pay extra for inspection, but with cars I have a process. If I want a relatively new used car I will have it inspected, but there have been times where I have bought average lemons (cars) because I have just needed a inexpensive car to drive me to work. These I don’t have professionally inspected, but I do the basic self inspection. I understand that it would probably last me a couple of months, but as long as I make the worth of the car and even more I typically am OK with that. So strategies to know how to buy: 1) know what you are willing to pay, 2) know as much from who you are buying from (reputation, reviews,), 3) have a professional eye look it over, 4) know when you are being sweet talked. 

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Chapter 20

The world is filled with inequality (and I mean monetary). many can’t afford a sustainable lifestyle, while others can provide for themselves and more. Those who can’t afford to live a sustainable lifestyle are under the poverty line, while people who can afford it are above it. Now this inequality could be do to just economic response, chance, privilege, and possibly work ethic. We can measure it by data (usually tax season, usually via IRS) Now poverty is a really big and frightening thing (not just nationally, but internationally as well).  Now there are different political views on what should be done. Utilitarians believe government should aim to make the most people happy, while some believe in the idea of maximin criterion (the government should help the worst-off people of society). There are some who say government shouldn’t redistribute wealth or interfere at all. Now with political philosophies to help shape governments, policies change to help reduce poverty. Ranges from welfare programs to redistribution of wealth in the form of negative taxes ( taxes that collect money from capable homes and give subsidies to low income homes). Charities also help, often times without giving money; charities providing shelters, food, education, protection, etc.

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chapter 19

 This chapter offers insights on the difference of wages and the reason for one to have a higher (most likely) wage than others. Now a lot of it was common sense. One may get paid higher if they have more education, are more attractive, put in a lot of effort, are stronger, or have a riskier job to perform and possible more stressful. It did not really shock me to learn that if you choose to continue your education, you may get paid higher (mostly because school has always instilled this thought process into me). One thing that did very much catch my interest was the superstar phenomenon. It was interesting (yet should have been very obvious to me) that the reasons that famous actors or athletes get paid so much is that they are not only the best, but with the usage of technology and media they are able to demonstrate this to a larger range of people. It makes sense, good movies have good actors, good movies are popular movies, popular movies make lots of money, so good actors gets paid lots of money.  I always thought that athletes (Like NFL players) get higher paid wages because of the labor intensive work and danger associated with the sport, but I never took into account that the large and expansive audience also contribute to this. (It seems like a major duh moment now). Now another thing I found truly interesting if not somewhat saddening was the experiment performed by Marianne Bertrand and Sendhil Mullainathan and its results. These economists performed an experiment in which they sent fake resumes with names common among white Americans as well as names common amongst African Americans. Resumes with the names common amongst white Americans were more likely to be responded to than the ones with the ones with the African american names ( I believe that it was 50% higher chance). Now my true thoughts on this can be more political than economic. As a Hispanic male I have used my nick-name (Bert) on my resume, because I was worried that my birth name (Humberto) would somehow make me seem less qualified than my white counterparts. I also used it for my “benefit”. I never learned to speak Spanish (for reasons that take too long to explain), and I felt that if people had seen my birth name they would automatically assume that I could help with international clients. I really related to this experiment  and I have had personal experience with this form of discrimination. Finally, I will talk about the earnings of gender and race. White men have a higher median annual earning than every other category (white women, black men, black women). I didn’t find this shocking but I kind of lost fire here writing all this, so I kind of just thought of one of the main issues of the 21 century to address. Honesty, I understand. People can bring up privilege, socioeconomic inequality, etc. I can honestly understand. 

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1)Define the various aspects of “factors of production” and give an example of each definition. As well provide a connection between the factors

average:  Capital: stock of equipment and structures: mixers for bakers. Labor: work/time workers put in: hours put in by each baker. Land: physical location of production :rented space of bakery. Each one could not be efficient without the other. One cannot be used without the other. 

proficient: Factors of production would be the various inputs used in the production of goods and services. The main three are capital, labor, and land.Capital refers to the stock of equipment and structures to produce the good/service. Labor is the amount of time and work produced by workers. Land refers to physical setting of production. Now to give an example of the factors we can imagine a friend (we’ll say his name’s Mike) of yours wants to begin a baking company. Mike does not know much about business but knows how to bake well. You explain to him that he will need 3 things to actually produce a profit. He will need baking essentials like trays, ovens, measuring cups (etc.). You refer this as his capital. You also tell him that he will need a location that can accommodate this sort of business (preferably with ovens already). This is his land. Now if Mike wants to maximize his profit he will need to also know how many workers and what wages to pay them. This is the labor. Now after Mike figures these factors out, he will be ready to set up production. Now does one factor affect the other? Of course. The best way of giving an idea is thinking that, If Mike decides to pick a smaller kitchen to bake in, the amount of workers it can efficiently contain (while still maximizing profit) lowers, and as well as the amount of capital that can be kept in such a small kitchen. Another way of thinking of this is that the less capital mike has (such as mixers, bowls, ovens) the less the marginal product of labor could be produced (if two people need the mixer, but there is only one mixer that could be used at a time, the additional person will create less outcome). The factors of production all affect each other, by following the same demand and supply shifts.

2) Explain how immigration affects wages of production.

average:As there are more workers being provided because of immigration, the need for the workers are not necessarily increased. If the companies were to increase the amount of workers the wage would decrease.

proficient: A company finds a wage through the equilibrium or the intersection of the labor demand and labor supply curves. Now as we increase the amount of workers available to work we are increasing the supply-labor curve (moving it to the right). This however does not affect the demand curve-labor (the need of the labor/the value of the marginal product/ or the difference of product between adding an additional worker).  So as the intersection is moved now to a larger quantity of workers, but the wage is also lowered for the workers. wage=equilibrium of curves. 

3)A bacteria was released into the environment and is affecting all the peach trees within the west coast. The bacteria decreases the amount of fruit each tree can produce by nearly half. Explain the supply and demand curves for labor. 

average: The supply of workers stay the same, but the demand for the workers decrease.

proficient: Since the bacteria does not affect the amount of peach-pickers provided, the labor-supply curve stays the same. However since there is less peaches to pick, there is less profit to be made, and so the demand curve shifts left (since there is less peaches to pick the demand for peach pickers lowers.). How does this affect the wages? The wages will ultimately lower, since the business wants to still profit maximize. Ultimately the supply curve will shift (eventually) because with less demand for peach pickers, jobs will be harder to come by and since wages decrease there are chances for alternative opportunities. So there will be less peach pickers available. 

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chapter 17

A few groups lead the market and make it hard to enter. Big fish in a little pond, that is not fair. Oligopolies amirite? Lol #eye roll #cringe

A pretty good example of an oligopoly turned monopoly would be internet companies (google, Microsoft, yahoo, etc,). The companies and search engines were running the market, then google had to be google and dominate its competition. Not only is Google the number one search engine but it owns multiple companies. It also controls majority of advertising revenues. Now with almost any growing company there will be an increase in regulation. I believe that one of the biggest regulation agency’s to intervene in google’s growth rate has been the EU (which is wild). 

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chapter 16

Advertising for oligopolies and monopolistic competition, I would say is a pretty good strategy most of the time. The more identical (exactly the same) a market becomes I would say that advertising poses little sense. For example, dairy (specifically milk) industries have little diversity in the product they sell, and the prices set by the market are identical; meaning that there are no distinguishable traits to advertise over others. Oligopolies have similar items I believe that there is enough diverse and distinguishable traits to use one company over the other (so why not advertise what makes you different from your competitors? Whether it be prices, deals, or popularity). Example in my mind would be cell phone companies; each company want to maximize profits and although advertising is used for getting a larger number of consumers, it would be an excellent strategy to compare each companies products (indirectly). I would say the most interesting part of this chapter is the introduction of monopolistic competition. I quickly understood what entails this market structure, from the book example. Although books can have similar prices  the content separates it’s readers from others. Although all writers are competing to sell more books than others, the entry level of the market is pretty easy. I mostly found this interesting because I’m a huge bookworm and thinking about writing and possibly becoming a writer, It was interesting to think about the economic structure behind it.

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Chapter 15

I had known about monopolies since high school economics. I had learned that they were basically giants in the business world. I learned even if monopolies make prices, they only consider it from a supply and demand curve (as any other business). I had always just thought that monopolies had set prices a different way (probably form focus groups or something). A couple of examples of natural monopolies are energy, railroads, and water services. Consolidated Edison is an energy company and it is actually one of the main ones in the US. ConEd. is actually one of  the biggest energy companies in New York. They have their own electrical grid within New York. They do have high cost and many are angry with the “forced” increase in those costs. I expect the price to fall if this business was given a more competitive market.

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Chapter 14

Every company wants to maximize the revenue it receives. You can often find the maximization of revenues at the intercept of marginal cost and marginal revenue. As cost increases (marginal). This intercept is equivalent to the price and the quantity that would maximize revenue. Now P=Mc because a company wants to have paid the minimal amount with producing each output. If Mc (marginal cost) was below the price level then not only is there lower quantity goods, but a lower production (lower than it should be trying to). If MC is higher than P then it is exceeding the proper production, and having lower profit. P=MR is here as a constant to intercept with the MC line to find max cost with max quantity (with maximizing profit).

I believe that a company that reflects this is Dixon Ticonderoga Company. I feel with little differentiation in pencil businesses it would be a perfect example of a competitive firm. Since pencils do not design there own prices they are price-takers. They also want to know which amount of pencils to make with the price established. Maximizing revenues. 

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chapter 13

Marginal costs curves begin to fall as efficiency is added with the increase of one input. Eventually it will not be efficient costs with every additional input, as marginal cost hits its minimum. With enough included input eventually it will decrease the yield and increase the marginal cost (to the point of it rising). Firms want to minimize cost and therefore will see if every additional input is either hindering or helping maximize the yield. At some point the cost will exceed the yield and will be bad for production. So basically a firm will want to get as much bang for their buck as possible. I can apply this concept in only a few aspects of my life. I could say gardening. I'm a pretty avid gardener and so I can see where eventually every additional unit (a plant) would eventually hinder each other from growing the maximum amount of product (various reasons can include water competition, and lack of growing room). The costs will increase with each yield. Whatever you produce (increasingly) has an opportunity cost possibly equivalent to the cost of every additional unit (output). 

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chapter 12

I still believe that progressive tax is a very beneficial tax. I know that it is a very politically motivated answer, but I see the benefit of having and growing equality. Now, I also see the other points of view. Income tax is also understandable (but then again I haven’t had much experience with very many tax systems).The concept of equity fits into a tax system normally by an exemption or a tax break. I believe that the government takes into account not only income, but status of relationships, whether or not your in school, how many children you have ,etc. It makes sense that if you're at a lower disadvantage you should probably pay less or receive money back.

 Incentives fit perfect into a tax system. Incentives in tax systems is to provide less or to gain. What i mean by that is incentives help all the time in economics to help people respond. If there was an incentive to possibly pay less on tax, most people would do it. Actually people donate to charities and also buy are just for tax breaks.

My personal views on trumps last tax bill, “tax cuts and jobs act of 2017” is very against. Many people can probably already tell why, but many economist have similar views. And yes I can find data to back up my views. 

Read this article and see how I think: 

https://www.investopedia.com/taxes/trumps-tax-reform-plan-explained/

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chapter 11

Public good is a good that is not-excludable (it does not exclude the general public) and non-rival (having the good does not inhibit another from it). My favorite example of a public good (or at least something i can guess as a public good) is fresh drinking water. Let me explain. Water is non-excludable (or at least in this country), and a good example is a water fountain. Public parks often provide water for drinking and it’s open to everyone (I’m also pretty sure that if you walk into a restaurant and ask for water, its free). Water is non-rivalrous as well (once again in this country). You will still be able to drink water if i drink water. Of course we can think of the costs and benefits. Costs of providing the good could be maintenance of utilities. You need people who clean water and you need people who can install water utilities. Benefits is that everyone's basic need for water is met. We choose to provide this publicly, because water is a basic human right.

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Chapter 10

I had to look up different types of  negative externalities just because I only really know water or air pollution (usually from companies that pollute large amount of one or the other). Before I examine my choice. A negative externality is a cost that a third party experiences from a transaction. (companies pollute and people suffer both environmentally and physically). I wanted to choose smoking as my negative externality because. Smoking harms people through second hand smoke, which can cause a myriad of diseases. I don’t think that this is really something you can negotiate or bargain. How could you possibly? In regulation, we would ban or even limit the amount of cigarettes that can be smoked by a citizen (or possibly limit the amount of chemicals in cigarettes), but that would be very hard to actually enforce. I can see it actually being taxed, and I'm certain that they have taxed cigarettes already. it has decreased the amount of usage. I feel that most things that are bad for the health of society, are heavily taxed.

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Quick disclaimer: I had to read these essays at least 3 times each, to fully understand what these guys were saying. 

I truly believe that protecting manufacturing industries from international trade is silly. Although employment has decreased in the manufacturing industry (in the U.S.), the U.S. is still one of the biggest manufacturers in the world. If we wanted to we could probably negotiate trade agreements but why just limit or only include manufacturing. Just like Richard Posner said while discussing trade agreements and it’s relation with manufacturing, “ But the efforts should be extended to services. I can think of no rational basis for putting manufacturing ahead of services.” There is a lot to consider with international trade, And manufacturing isn’t necessarily the most important (I like to think of it as a small part of the large machine that is the US economy). 

From what I can gather, there seems to be a lot of people affected by steel and aluminium tariffs. Personally I am worried that prices of goods will go up (steel goods), And before you go duh, I’m worried as a consumer trying to live for cheap that this will just make everything unbelievably expensive. I also think it’s not beneficial for trade relations. I’ve read that EU and several other countries were thinking about creating a “retaliation tariff” on american goods, in response. I mean there seems to be also a domino effect. If we add tariffs on aluminum and steel, prices heighten, companies pay less and have less workers. I really don’t know who benefits, but a lot of people won’t.

The peak for manufacturing employment was around 1979, but I could not find peak output, however I did find numerous articles explaining that output is increasing as employment decreases.  Specifically :

https://www.pewresearch.org/fact-tank/2017/07/25/most-americans-unaware-that-as-u-s-manufacturing-jobs-have-disappeared-output-has-grown/

I really believe that  job decreases happen as technology increases, and as productivity tracking becomes more precise. I can also see that many people are getting educated and working in business administration, health, and hospitality, (all people oriented things; things that require human interactions, unlike manufacturing)

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Chapter 8

Deadweight Loss: unfulfilled 

I know that this is an obvious example, but I liked how simple it was and how it made me feel while reading the textbook. The reason I used this word for this concept is because of the examples used in the textbook. Deadweight loss is basically the loss of surpluses in a market “distortion.” The easiest to come to mind is taxes. Now just thinking about taxes gives you this feeling of dread and lack of fulfillment , and it kind of should. In a basic transaction both buyers and sellers wish to earn benefits from economic activities (called consumer and producer surpluses). So as a consumer you benefit if you pay less than what you are willing to. Producers are happy if they are paid more than the actual cost of a service or good they have provided. Now in many situations both sides win surpluses, however tax on that surplus kind of eats away at the benefits both parties would have received. Now that doesn’t mean that all of the benefits are  taken, but if someone takes away some of your money or charges you more than you are willing to pay, this is where the lack fulfillment happens. I’m even starting to feel unfulfilled typing this, however I don’t really have a whole lot of experiences with tax, or I don’t really pay it much mind (mostly because I’m a college kid living with my parents). Do you feel unfulfilled paying taxes? How do you feel about taxes?

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Chapter 7

the property of society getting the most it can from its scarce resources is known as efficiency, however efficiency is used a little different in this chapter. An economist basically believes that society should get the most out of its limited resources. Efficiency in this chapter is often explained best by its definition, “the property of a resource allocation of maximizing the total surplus received by all members of society.” To really describe what this means we would have to break this down into its components. When it's talking about surpluses it refers to consumer and producer surpluses: (The benefits both producers and consumers, receive from participating in the economy). We clearly, as consumers, want to pay less than we are willing to. That is the consumer surplus (what ever you were willing to pay minus what the actual cost is). Producers Surplus is the same thing but the inverse relationship (whatever is paid minus the cost production). Now if we maximize both surpluses to equilibrium, we are highly efficient. Both supply and demand find the maximum for both surpluses. Now if we wanted to we could connect this chapters definition  with the general definition. Both allocate resources to their full potential with the lowest (or none at all) waste. 

I believe that market efficiency shouldn’t necessarily be the goal of policy setters just because Markets aren’t always perfect. Although we would like to say that they are, there are times in which policy makers (politicians) can effectively “remedy” the problem issued by these markets (markets that are not performing efficiently/ market failure), but markets seem to be generally self-reliant machines (invisible hand). Now should it be important? Yes. Should it be the goal? Not necessarily. I believe that understanding how free markets work and when they need a tune up is very important, but most perform efficiently and self-reliant-ly.

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Chapter 5

The closest shopping district is Glenwood springs for me. The displays showcased the best clothes they have (fashionably trendy and lowest costing). Most stores near me only really sell items that are rare to find anywhere else. With the lower supply, demand is pretty high (especially for end of season sales). Most windows displayed sale signs (15-20%off). I believe that that is a fantastic way to sell clothes, I personally would have done everything the same. I definitely still see a huge difference in price from the shops and any commercial clothing store (american eagle, etc), however since similar types of stores are near by most clothing can find mates near by. I also think with the demand the cost is about right.

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chapter 4

I believe uber creates a shift in the demand curve of taxis, It discourages the taxi companies. I think taxi companies might try to compete with uber which brings the value down, with a high supply. Uber you can really get anywhere and it’s a growing company. I feel that it makes the taxis kind of obsolete.

With cafes and similar kind of establishments i have seen where the supply increases over a specific amount of time, also with a wide variety of supplies. I definitely think that most will go out of business (just because with so many competing cafes in my area have grown, demand will get lower)...

Other companies that I can think of target. I think of the ways in which it has definitely works is a diverse collection of items it has, with a lot of supplies with average to little demand for a specific item.

#lastminute