Trade Deficient - Oppurtunity Cost (October 28th, 2011)

What does "Made in China" mean?

• It makes up 2.7% of US consumer spending.
•  Only 1.2% reflects that cost of the imported goods.
• The U.S. content of "made of china" is about 55%.

It is all based on oppurtunity cost.
If the trade deficit should be true, then the trade surpass should make more jobs? Actually, no. Agriculture jobs have declined.
Why doesn't trade deficient destroy jobs?

1. The identity: You pay with your imports for your exports.
2. When you specialize, you get richer: Income Effect.

Round about ways:

• He lectures, gets money, pays for food, paying Wegmans.
• A list of factors are plausible to impact the trade.
• It allows trade to be plausible.

That frees up their budget (overtime the impact of income for food was changed and has freed up.)
But what is the trade deficient? What we spoke about is the trade account or current account?
USA buys assets: Capital account balance has skyrocketed on surplus. People have been buying shares and entrepreneurs buying buildings.
So long as we maintain attractive to foreign countries, we will remain strong.

By tearing a dollar, you are committing a felony. You hurt the American economy. No matter what, as long as you take the dollar way, the United States will always get it right back, which is good but it is also a good thing based on trade deficit.

Trade Statistics (October 26, 2011)

1) "We aren't getting better jobs from losing the poor one."
The people who would lose their jobs due to mechs. There is a small portion of those people who will not be a bad time because the United States allows trade. Remember, self sufficiency is make us poorer.
Trade adjustments have not been able to sustain training future possible jobs, such as a windmill technicians. Instead they were hit with solar energy technician where they can't use their skills.
If jobs are opportunity of being out busted, then the wage will definitely be increasing.
Technology is not a part of why we stop losing jobs because they all benefit us. Trade is more of a reason why people don't have their jobs.
The economy shifts to the skills that we retain in school. It is not fixed so everyone will have a job but the offering is still there. Job opportunities shall always be there for us to choose.
Trade statistics are MEANINGLESS!
From the people who work with mechs in factories now, only 9% are part of manufacturing jobs in 2009.
3) Manufacturing outputs produced more things now than we have ever have before, even China. So is America being "hollowed out" is bullshit.
Shouldn't "the economy" put people ahead in profits? It does!

• 1985: USA ATMS: 60,000 ATMS and 48,500 Tellers
• 2002: USA has 352,000 ATMS and 527,000 tellers.

ATMs compliment it instead of replace workers. It is debatable on what technology can do since it can compliments or help produce faster.
Via Tan Fietcher: Manufacturing is low, but as an economist he never mentioned why it is a bad thing. He also discusses that if society cuts in consumption, but the efficient will and shall not fall. He is incorrect.

EWOT: Comparative Roommates

Lately, I tried to take the idea of two different entities and comparing how they help one another to allow a economic sustainability. Well, in my own room, I started to think about how I sustain both me and my roommate with equal trades. Although it sounds boring, I love water (and liquor) but mostly water. I could drink water over anything and it's hard to live in the Quad without a water fountain nearby to refill a water bottle. So now every three days or so, I buy 3 Liters of water for $2.50. Normally I would drink it on my own but I also feel the need to give some to my roommate since he too would like to quench his thirst. But lately, I've been getting somewhat annoyed that he receives the water for free. So a couple of days ago, I decided that every time I would buy the 3 Liter water bottle and he wanted some to drink, he would have to do two problems of Webwork. Normally it takes about 5 to 10 minutes to finish the problems but if he is capable of doing it, he'll be able to gain access to the water. Since he does not have enough declining left, I think it would be somewhat worth it to do two problems that I have a hard time doing for the access of good quality water in comparison to fountain water, (it tastes like iron) and Wilson Common water, (it's a pain walking back to a cup of water.) Now I have less time to work on the Webwork since I take 15 to 20 minutes to do 2 problems and he has access to water that I bring on my own during the week.

Castrating Animals, Long Live Roquefort, and Rolling Cigars

What Mike Rowe in his conference had also got to me as well. Right now, I'm a student studying at a private college for a dream of being a Chemical Engineer. Yet I acknowledge those who are studying liberal arts to be some kind of a joke. Even more so, those who don't even try to attend college. It is not predominately a bad choice to continue getting an education because of the harsh difficulty of getting a job in the United States. But what I also realized is how we under appreciate those who do things that not only make them happy but also allow us to live easier lifestyles. The presumption of living a dream is interesting to me. We all work hard to do what we want to do but never take a step back and allow ourselves to see if that truly brings happiness upon ourselves. Just like the article of rolling cigars, we don't always choose what we want to do with life, we sometimes allow our passion take us to where we want. We allow society to predestine our roles sometimes and never identify for ourselves where we would like to pursue. The same goes for the Roquefort where she said that it would be difficult to get Roquefort for our the customers but it would also be difficult to allow for us to have a choice. We would allow our government to make the choices for us and not allow what we desire to make those choices in the long run. Restrictions and containment; they both suck.

Comparative Advantage (October 24th, 2011)

(Drawn graphs of Rochester and Cornell: Rochester makes 10 glasses of wine and 5 cameras, where as Cornell makes 3 glasses of win and 4 cameras.)

Rochester students have an absolute advantage at making cameras and wines. But which of these two universities make it efficient? What is the sacrifice?

Rochester makes 5 cameras for the cost of 10 wine bottles. It costs them 10 wine bottles to make 5 cameras. Therefore, the price of the camera is $2 worth of wine and the price of the wine is $0.50 worth of a camera.

Cornell makes 4 cameras for the cost of 3 wine bottles. They can also make 1 camera for the cost of 3/4th's of a wine bottle. Therefore, the price of a camera is $3/4th the worth of a wine bottle and the price of a wine bottle is $4/3rd worth of a camera.

• Rochester has a "comparative advantage" in making wine over Cornell.
• Comparative Advantage is the ability to produce something without as much of a sacrifice as the other place. What is made is made efficient and cheap in comparison to someone else.
• Nobody can have a comparative advantage over everyone. 

If Rochester initially made 10 wine bottles and 0 cameras and Cornell made 0 wine bottles and 4 cameras and they decided to trade 3 of each, such that Rochester gained 3 cameras from Cornell and Cornell gained 3 wine bottles from Rochester.
Then the final product will be 7 wine bottles and 3 cameras for Rochester and 3 wine bottles and 1 camera for Cornell.

This creates a change in the graph known as the PPF ( Production Possibility Frontier).
Economical sustainability from retaining more of an output. You can pay for your exports with your iimports always!

Individuals are the entities and should not be grouped with vague statements (Rochester is in western New York, so Western New York is good at making wine.) That statement is incorrect.

Failures

1. There is self-sufficiency, which is the road to poverty.
2. Function of productivity in each country, such as the United States and China.
3. Policies that restrict people from trading will make people poorer.

The Boosting Outputs

1.  Workers have been replaed by techonology.
2. What we import today is technologically heavy.
3. High school jobs stay and shall allow jobs to leave the area.
4. The jobs are more pleasent than what it was before.
5. We have lots of skilled laborers.

Property Rights

From the notes posted from Rizzo's lecture, I believe Property Rights is a moral enduing system that is based upon others payment for ownership. It's understandable to note that if someone is making a payment for said set of land that they should do anything with hat set of land that will not conflict with illegal activities. It is also understandable that you have the right to remove those who are on your land or disobey the orders placed on that set of land because it is obviously yours. Private property falls into that category. But I also believe it is based on a moral system throughout society. For example, kids would not try to play on people's lawns because they know that the owner would have them get in trouble no matter how much fun they are having. But what I was also thinking about was when someone decides to put their stuff on a chair beside them to save the space for their friends. Their friend did not pay for the chair so why do we feel the need to find another seat when such predicament comes? What if you leave your own bag to try to do something and end up coming back to the seat being taken away? Based on property rights, is it wrong to take the seat or is it wrong to move the bag? If moving the bag is violating private property, is the seat also an extension of the private property?

EWOT: The Homeless Subway

This week I was thinking about what Rizzo said in one of his lectures about paying to have someone get removed from your side. He then mentioned that how rare it would have been for someone to pay a homeless person to step out of his seat and leave the presence of the giver. In the act of kindness, why don't we apply the same thing to those who play music in the Subway? Although they don't disperse our presence, they certainly are annoy us in a small way. Especially when you're trying to have a conversation with a friend that you are wanting to catch up with and suddenly you're rudely interrupted by a mariachi band or a guy playing the drums. I would make the effort to not only pay them but to tell them never to play on the train again because I know that I'm not the only one feeling that way. Not to stutter confusion but I want the application of giving money not only to be somewhat of a gift to them for begging but a statement from society that we would rather have you play elsewhere less disruptive and where we will not feel wrong for not assisting them from their past failures.

Production Possibility Frontier (October 21th, 2011)

Trade and Exchange
Trades can have technicalities such that a rare ore can be sold for wheat but they can end up making a moon cake and a laptop.

Rizzo did an example with his house being 120 yards and his friend Rich having the same amount of yards. They both have 10 acres of land in which they weed and mow.

• Rizzo takes 80 minutes to weed and mowing takes him 40 minutes which adds up to 120 minutes.
• Rich on the other hand  takes 120 minutes to weed and 120 minutes to mow, which adds up to 240 minutes.

Rich offered to weed 3/4 of Rizzo's driveway if Mike mows  his yard.

• Rizzo will then take 20 minutes to pick weeds from his yard, 40 minutes to weed out the yard of Rich and 40 minutes to mow his yard, which will add up to 100 minutes. 
• Rich will take 120 minutes to weed his yard, and 90 minutes to weed out Rizzo's yard. Since he doesn't need to mow his yard, he ends up using 210 minutes of his life.
• Although unfair because Rizzo takes less than half the time Rich does, it benefits them both because they both gain time from doing the offer.

Production Possibility Frontier
There is 1000 Jibbitz and 2000 Coon Skin Hats. Rizzo can only produce this if he is given the resources, knowledge, and technology.
Properties of PPF's:
1) All points in the cure are achievable.
2) In comparison to Rizzo and Mrs. Rizzo, Rizzo has a absolute advantage over his wife at making Coon Skin Hats but she has an absolute advantage with the Jibbitz.
3) All points outside of the curve are unachievable given the resources, knowledge and technology given to Rizzo.
4) Points on the PPF are "productively efficient" (getting what people want at a low price).
5) Slope There are tradeoffs for hats and Jibbz. The slope is the magnitude of the tradeoff.
6) Change in slope - Law of Diminishing Returns (Increase in opportunity cost).
7) Economic Growth.

1. Resources
2. Technology
3. Trade

Cooperative Advantage

Trade and Exchange (October 19th, 2011)

Once we remove the circle where we started to know everyone, your decisions will be altered. Adding one more student to the class will not change our experience throughout the lecture.

Rizzo had to send legal documents to his mother. Why was he not worried? Well, as a FedEx worker, they are all strangers so the law of large numbers does not exist.

1. FedEx dies this all their time; they employ people to do this as their job.
2. There is no establishment of trust.
3. Faith. Past experience? Well if this is his first time in FedEx he would not know about the feedback loops.

If they fail, they have a negative effect to the company and the competition between the postal service and UPS will increase. This is based on the institutions of good things in society.

Trade & Exchange
Production process - Factors of Production

• Land
• Labor
• Capital
• Physical
• Human

Land: It is not an economic resource unless we put a value under it like Iron Ores.
Labor: Physical and mental abilities of the average body. Just the regular people with no particular skills.
Capital: Physical creation of what we have now with manipulation (iron ore melted to a iron crowbar to help break into things.) Human is augmentations that we can do to make us special such as a special ability or skill.
 
Factors of production is using resources that can obtain a value to it:

• Self sufficiency
• Specialization, Exchange, and Discovery

PSST - Patterns of Sustainable Specialization in Trade
If you do work on your own, you are not doing a economic activity because you are doing it on your own. ie. If Rizzo used three dollars to make a pizza and it cost 15 dollars to buy a pie of pizza, then it would not be beneficial for him to do that because it is not a economic activity. If everyone knew how to do it, they would spend less on buying it.

Specialization and Comparative Management:
Most trade, nothing new is created. So why do we do it? To acquire wealth? Then what is wealth?
Wealth is a subjective and the wealth of nations vary.
Growth occurs when input and stuff are further apart. The exchange only matters when there is something that is valued.

Rizzo sold cards that had more value to the market but had less value to him that the card he obtain from the trade. He obtain the card because the value of the exchange would benefit him in which he would make $7,000 dollars because he would have completed the set. in the long run, he gave someone 200 dollars but he also made a ton of extra money by getting a card that had no value but was important in reaching the profit.

Reciprocal Alturism and the Golden Rule (October 17th, 2011)

The Golden Rule (A need when you are dealing with other people)

• Use as a means to another end. People argue that communism is bad because of their greed but that's not actually true because people are not omniscient. They share ideas and work together to prosper.
• If you try to produce for people, you end up starving. We are encourage to improve ourselves as individuals. Most of the benefits are felt by you but there are other benefits as well. 
• People view the thought of owners considering others to be selfish.

Reciprocal Alturism
In this scenario, Tony gets a kidney from Tina.  Tina, ten years later, her mortgage is bad but gets a donation from the church.

• Shrink tire and location and these seem morally wrong. Consumers think only firms are greedy and yet they hope to do well.
• Pursing the projects that interest you brings new innovation to society. Work together on that project to make it part of existence. You can not know everything and it is too costly to consider it.
• Economic and moral obligations to maximize the benefit of the group.
• Acting kind can be costly to the group.

The Silver Rule is not to do others what you would consider unfair or unjust if they did it to you.

• Use it when you are dealing with strangers. It is okay to be considerable with your own money, not others.
• No such thing is a profit. If you sacrifice profit you may go out of business and running profitable in business requires "love" or better said passion. Socially responsible to maintain profit for you and others. Not enough love to go around and money is always a good thing.
• Relying on strangers is better than friends
• Leave love to friends and transactions to strangers.

EWOT: The Rule of Efficient Pens

Lately in Professor Rizzo's class we discussed the rule of law and efficiency. It is basically when others leave their belongings unattended, we have some sort of notion to leave it alone. This is some sort of value law that states that we will not touch others property without permission. We also should not be rude to one another and try to put it down while you sit on the seat because that spot was somewhat to be reserved. But is that always the case? What about when you borrow a pen from your friend because you left it back in your dormitory. Most of the time you forget to give it back to the friend because you forget it's theirs and not yours. But who's to say you have to give it back to him? Is it just efficient not to give it back to him because he might have the potential to not want the pen back from you? If that's the case, then who's to say who's right and wrong? Is it then wrong to keep the pen from him or should you try to give it back to him because it was his possession to begin with? I am getting off topic from the rule of law and efficiency but I do believe these all apply to the metaphoric law we have hovering around us and the decisions we conduct in society today.

Efficiency and the Rule of Law (October 14th, 2011)

The Zero Sum Fallacy

Where they end up getting their wealth. Producers gets 25 dollars and hour versus a wage of 15 dollars an hour. In Marxism, we all work in our own civets together. Workers can only be exploited by the exploited by the payment but the issue is that it's ironic by markism.

The illustration of the change in shoes and the design of shoes that helped change the price of them compared to others. Just keeping mind of a later day.

The market often doesn't work as well.

• They lack of existance
• Institutions

Buying or seller exerting their power to a buyer or a seller. Prevention of Rizzo to do extreme things when or if he has tenure. Markets work well when there are many decisions and choices for people to make. Insurance market is an example of a lack of a market that has no interaction. Rizzo knows his health conditions based on what he knows about his body bu the insurance company does not.

"Efficiency"
Delivering what people want at the lowest possible cost. What the people wanted. Ridiculous if the school to place their law on not possess items. Their is a behavior when we respect the possessions of others when unattended. To have the law work better, the market that works well is the Rule of Law.
 Racism is not counted and arbitrary. Good laws must be general and not specific. Some countries expect that if you are wealthy, everyone mooches from it.

Inflation
Caused when there is too  much money around. General increase in all countries of the economy of the products. It is not that the price is higher today or any type of products. There is no actual chain reaction to it. We will always strive for more on the payment.
It is inferior and based upon a golden rule ; production to serve the interest of others and not materialistic to ourselves. Who is the moral authority to say? The golden rule is based on thoughtful actions to others as expected to ourselves.

The Case for Contamination

The idea is that by others living in other countries and helping one another through cultural diffusion will allow the advance of civilization as it is today and the economy driven power that the people have and not any type of single being. He expresses the case that most of the people who live in Ghana are capable of expressing different products, models, and agriculture of structures and goods that help countries expand and understand each other. The idea of preserving the country from the idea or limiting the views from other countries would diminish the country as a whole since there will be a decrease in the innovation and production of the countries. This idea of stepping down on countries that pursue ideas through connectivity of thoughts shall be the end to all types of progression. This kind of reminds me of how the United States allowed immigrants from all types of countries to enter the states which helped improve and progress the country substantially.

Unintended Consequences (October 12th, 2011) *No Lecture 10/10/11

1770- Weavers were not paid. It made it so they can advance to capitalistic products. Banning the drugs increased the way it is used because of it's availability in the United States.

Trying to regulate a complex system with simple rules.

• Limited information
• Short horizons (Politicians term time)
• Poor feedback
• Self involving incentives

When regulations push incentives, incentives tends to push back. Higher cost to hire someone with disabilities/race because it would cost more. ie. Rizzo would not hire a black person because he knows that in the long run they will cost more because they will charge for racism on the company. Who are all the interested parties that will respond to rule.

Trade is not a zero sum; "pie fallacy"
If there is a dash between both people, both sides would benefit from it.
No one plans the market system. People work together on it on their own and it's natural. Traders are not necessary. It retards Economic growth. It is going to penalize work, innovations, and payment.
"Stock" Wealth vs. Income "Flow"
Wealth is a stream of income that he can produce throughout the years.
Income is the 535 congressman that have the power with the stroke of a pen.

EWOT: Wilson Day

On Wilson Day, the University of Rochester has the opportunity to allow the students to give back to the community of Rochester by volunteering and helping others try to fix parts of a community. Yet I feel there's something more to it. I feel "volunteering" is a stretch towards Wilson Day. If on Wilson Day, the University of Rochester tries to help the city by volunteering part of their time, who is there to say that part of their time is put to waste. What if Wilson Day was purposely made for everyone to shred weeds out each year. I'm not saying that these companies are doing them on purpose but where are the results? Last year, the opportunity cost of going to Wilson Day for me was to socialize with the hall mates. But what ever happened to the patch of grass that we weeded out? How is it that every year there is the same type of weeds for everyone to pick up? Why can't the they put money aside and allow others to renovate the area so that they can completely fix it? Or is this just ultimately to have everyone do something every year for Wilson Day? Once again I'm not trying to demolish the pride those have over Wilson Day but it always seems like every year students go to the same place to do the same thing we had to do last year.

Theaters and Fine Arts (October 7th, 2011)

The main idea behind the article is to discuss how to government wants to subsidize art in the economy. The problem with that is two things; there is a fear the government would subsidize the paintings and sculptures in private sectors and gain the money for themselves. But also, if the government was to subsidized it, there would be sadness among the creators of those fine pieces of art. For example, if the government wanted to subsidize central park then people would lose the feeling to spend time walking around with their family at the park. It would be meaningless and sad to see things that used to be an enjoyment to others taken away from the them. I know that I like walking with my friends to the park but if the government were to subsidize that park, I wouldn't walk with the same incentive than I did before.

Use versus Exchange (October 7th, 2011)

How much of this action changed my cost?
Thinking about the margin or Marginal Cost.
Rizzo might be a typical selfish person that you may understand. The idea of being selfish and selfish has little meaning.
Without the margin, does that mean his friend would be helping others and not sleeping since it's a self-action. For example studious, laziness, etc.
What about drugs and the availability of it to the public? My house is clean and I'm comfortable around it.
By waiting to release an album every year is a better marginal cost to maximize the happiness of his fans and gains the payment of it. If we watch groundhog day everyday, would the media post it everyday? No because it will become a norm. Allocation of resource in something else.

Use vs. Exchange
The relative scarcity of teachers and an athlete.
Teachers are much more common whereas athletes need to physically fit and defined in a sort of way that is a scarce resource.
We eliminate all athletes and teachers. Almost positive to pay a teacher more than MBA players.
We clearly value the teacher than the athlete even before he gets paid more.
Teacher as a total is more important than the marginal athlete which is the use versus exchange.
Scenario of the woman doing the same type of work out one gets paid more than the other. (Monetary versus Non-monetary wealth)
What becomes valuable? The book or the fly swatter?
The value is subjective and can matter different throughout our interpitation. It's not the water but when and why we need to that water makes it cost differently to others.
Sunk Cost - Cost where resources are not recoverable as I make my decisions.
It's like you have a relationship for a long time and staying with her for another year. What is the point if you will  not get the years back?
Bad economics decisions when you ignore some cost but good ones when you want to avoid costs.
Humans act with purpose
People respond to incentives.
Behavior will change when the benefits and cost change which is the law of unintended consequences. Often times decisions can make pattern decisions based on actions. How can someone know? You can't.
It changes the cost of getting into an accident if you wear the seat belt. We are becoming murders. If you care about safety and allocate resources and spend it on something else like health care and save peoples lives.

Broken Windows (October 5th, 2011)

The three problems with "it's stimulating" notion.

1. I did not choose the roof to behin with,
2. We lost the value of the resources used to regain.
• ie. Ignore the money, resources matter.
3. But..."What if the roofer was unemployed?" GANS?

With preferences, society is poorer if you didn't get the roof that you wanted or the bike that you wanted to buy. Before the storm, one had $1000 dollars and a roof. But after the storm, they have $0.00 and a roof that replaced the older one.

What is the money for society to help you fix the roof for you. Society was poor for that roof because it could have been for someone's deck. WWII got us out of the depression but killed many people. The funds have to come from somewhere; tax revenues. Fewer dollars now to spend. Resources have to come from somewhere. If the roofer was totally unemployed, ignore the money because resources truly matters. The wood gets used more and more people want it and the cost of the wood increases. After the storm, the wood would cost more because everyone is doing it. The resources come from somewhere. Jobs are not a benefit but a cost.

Jobs have an income, hence the benefit. Aside, it is a cost. You can't eat a bomb. It had lower values of consumption. There was no stuff on the shelves. WWII brought down resources, it wasn't about the money. The war stimulate technology does not need to find a war to kill others and get what they want. What have these resources done throughout history.

4) Cost are subjective.
The cost that are imposed, you never know about them.
5) Marginal Analysis: Water-Diamond Paradox
Something high in value has a low exchange value. You can't build a house with diamonds. It's just shiny coal.
200 seat plane and the total cost of going from Rochester to New York City is $100,000.00 . The average cost per seat is $500.00 and 180 passengers in the flighty. Given that the place will fly to New York City.
It may cost 50 dollars per seating what would it cost you to get on the plane. They are willing to change it for you so that you can get on the plane.
If the plane was full, the marginal cost: The change of your cost from taking the action. What does it cost to build a new plane? So much...
The cost of developing the drug. It could probably change fixed costs to get things to profit differently.

Basic Economics Principles (October 3rd, 2011)

1. How they make decisions
2. How people interact
3. Aggregated

1.  People faces tradeoffs (RANISTAAFL) ; which means no free lunch.
• What is a cost? 
• - There is too much of a good thing
2. Opportunity costs
• Breaking windows
• No new jobs
• On net, there is no change
• Before and after
3. "Marginal" analysis
• Subjectivism
4. Sunk costs
5. People respond to incentives

Cost
-Anything that consumes resources
-Spend to much time to get an A in economics.
-How to make pie as big as possible or evenly divided?

Drug Lag
Longer it takes to get drugs out of there and more people are harmed.
Drug Loss
Research and development on drugs but we only get about 20 new ones per year - $1.5 billion dollars

-reverse incentives is the waiting to get things approved. taxes are not cost; tax cuts and raised taxes do not have a cost money to collect taxes. Opportunity costs has a net benefit of your next best opportunity.

You win Bruce tickets but you cannot resell them. Versus Barry Manilow tickets which cost 40 dollars but they are willingness to pay for 50 dollars. What is the cost of seeing the Bruce ticket?
It was net value of 50-40 which is equal to 10.

Broken window effect is the disasters of the stimulate economy. Why is this bad for the economy?
What would happen if there was no disasters? The benefits are deducted from the costs.