Profits, Entrepreneurs, and the Last Class ( December 12, 2011 )

Profits: Total revenues- total costs
What is the wage? It is just a contract that says what people will excatly be ding? Wage is to eliminate uncertainty
What is interest? It is a price that comes from the supply and demand of the market of bankable funds.
They want something today they would eventually get later. The persuasion is the interest.

Rachel, Professor Rizzo's Wife

• 30,000 usage as a secretary, owns a building $6,000 a year - owns saving cost at bank with $23,000, pays 10% interest.
• She then opens a shop - works it for self, uses for own building, sells her savings, borrows $20,000 for ovens.

Economic Profit: Total revenue-total explicit costs - Total implicit cost = $1,700
If you make the choice of being an entrapeneur, then you'll be $1,7000 richer.
If negative profit, less richer because the decision made to be an entrepreneur is not a good deal.
The change of that quantity of the pizza market has to do with the Zar. Raises the wages of the workers until that number goes away.
Profits for selling, but things change rapidly. Expensive 10 restrict competition. Prevent competition by foreign countries. Loses are key. Make people pay for sucking.
Loses destroys resources.

Curing and the ideals of a Entrepreneaur ( December 9th, 2011 )

In the market who is it who helps the people? The politicians and entreprenaurs? Who gets the profits and how does it help the people or buyers?

Is it bad thing that people are paid for helping others find a cure for a certain type of disease? Well, it would obviously be paid for since society graces the provider of a cure in order to multiply and cure others for the same benefit. Why would people not make money for curing people? Why shouldn't someone make a profit for having to save someone's life? So if you have to cure someone, the distribution to cure others is based on the entrepreneurs.

 

In order to do that and be successful at it, you have to figure out what people have to value and how it will benefit themselves as well as other people. The profitability rate is equal to the rental rate and the appreciate minus the interest rate.

Economic Incudence and and the Elasticity of Supply and Demand (December 7th, 2011)

Legal Impudence: Sale taxes (Buyers) + Who will say days

Economic Impudence: Who really pays
The Initial Price for buyers is 3.00 and sellers is 3.00.
The Final Price for buyers is 2.75 and sellers is 2.75.
Tax feed is buyers for 1.00 and sellers have none.
The economic burden or the real cost for buyers is .75 due to tax and sellers for 0.25.

Tax rates that are too high and income tax is too low. None of this is being shown in graphs, rather just for the well being. Which side of the marker is effected? Buyers!

price sellers end up keeping and buyers need to give to taxes. Raise taxes and the problem gets worst.
Econmic liability for taxes is completely independent to whom eats it.
Firms and workers split of that tax. There is no share of the burden and if it is all the time.
Elasticity of supply and demand, meaning that it will be by three, so that if there are higher labor and many workers are not sensitive to change to wages. Social security taxes will kill you, not the yearly taxes.

Who legally has to pay, it is the legal elasticity of demand and supply who allocates the pay. Buyers going to get a bigger burden of paying the excess tax. Most taxes however are paid by sellers. Subsidizes by 1.00 of the gasoline from the refiner; supply would shift out and be less for us. Refiners get 3.45 (referring to the graphs on the written paper., oil gets 80%, 20% to buyers. It is the relative supply and demand elasticity, nothing else. Buyers and sellers are better off but not the market.

The Economic Indicence of Supply + Demand Changes

Making something illegal does not get rid of them. Drugs tend to be stranger when illegal. It is costly to make something illegal and it is a waste of time. It is resistant to change as 33 billion get arrested to 1.5million. More people are in prison for drugs than people in prison for other reasons. Prices for cocaine have decreased. Marginal cost of going to jail is dropping to zero after two strikes.
Excise tax - The legal liability for tax is on the seller. But who is baring the burden?
$3.75 to $4.00 costs to buyers is 0.75 on the economic burden.
$3.75 pay money costs to sellers = 3-2.75 = $0.25

Prices does not increase by the amount of the tax. Taxes can be bad because they prevent trascations from happening. Costs of IRS is also costly to monitor, enforce, tax, cheating the taxes is bad, wasting time, and raising taxes.

Price Floor, Income Taxes, and Legalizing Drugs ( December 2nd, 2011 )

Price Floor is a good example for the minimum wage. Since there is more people working for that firm, they would want a certain amount needed to produce the maximum for the job, and the rest of the workers would be a surplus. The next workers that they would have to get would have to become better workers than the previous ones hired due the expectations from workers increasing.

• It allows firms to hire less workers since it costs more and more to hire each one. Workers would then get less employed and more would want to be hired but less would want the opportunity to.

It would result to the same outcomes as the price ceiling.
The better option is to tax workers and earn income tax instead of using the minimum wage for the workers.

Legalizing the drugs would not reduce the drugs produced on a smaller level. It would become multi scaled where markets and firms would try to produce them to buyers in different ways that they can appreciate the drugs. Yes, it would be beneficial for the market as a whole and eliminate the black market of illegal drugs but distribution of harmful drugs can have a dangerous effect on young ones who can be exposed to these drugs.

Rent Control and Outcomes of Price Ceiling ( November 30th, 2011 )

Price Control leads to less apartments that are available.
The problem with that is that there is more of a demand for apartments.

• There is a shortage of apartments and thus more of them have to either be built with allocated resources from sellers or sell them at a higher price in order to catch the surplus of apartments and meet the margin of supply and demand.

The outcomes of price ceilings is to reduce the availability of apartments and make them harder to  acquire. So they either had to lower the quality to make them affordable for others or try to fix it so that it would be dealt with at a regular price to the public.

• The black market emerged and bribes were created because of it. People had bids in order to jeopardize the way to obtain apartments, especially in New York City.

• The problem with that was the rise of mid-allocation. Other neighborhoods that were not controller were effected by this.

Fairness and rights played a strong role in the distribution of selling the apartments. Discrimination was also a strong role, where it provided a social goods to others. It made other apartments available and less people were available from the market due to that.
There was however in need of monitoring and enforcement, which costs money and was bad for society as a whole. Yet it was not available at the time because monitoring would cost money and it would be bad for society a whole.

Reminds me of the article where students worked together to find out where they would live on campus (this was last week's article).

Planners and Meeting the Margin ( November 28th, 2011 )

Last class, only the price he sees in order to make good decisions. What is the difference of the trial and error from the government versus the market? Just hypothetical. We need to get good outcomes that the market was not capable of doing.

30 bucks to pay for making a guitar would be bad. It is better below.
What is the problem making it for S4? Marginal cost of the 25$ dollars. When he makes a guitar the world is poorer by 25.
S2 costs 15 dollars, there is a 10 dollar allocation on the table. S2 and S4 would have to get together and split the cost to make the world richer.
Everyone can do better off if D4 gets his guitar and gives it to D2. The world is not hurt at all. D4 and S2 trading would make the world richer. Lie that you made the bike and I'll give you half the cut from it.

After 15 minutes of story telling,
Planners do not have enough information because it is changing rapidly. They forget what and where we need it. The only way to live in this complex world is to disperse/decentralize ideas the best way possible. Allowing different states would work in a separate ways without the federal governments approval.

Some properties of EQ.
Consider a stylized economy with 5 consumers and 5 selllers, not necessarily distinct.

Rent control, Price ceilings
Once you do a nice thing, you do a moral obligation to do it all the time.
Beat the competition out by checking out the obitenuary from the NY Times.

Markets with Knowledge (November 25th, 2011)

Thermostat is a good marketing device of knowledge. Centralized knowledge is good but uncentralized knowledge can be useful as well depending on how it is used. How prices can be signals to adjust to clear the market, depending if the price rices or falls depending on how people actually get it.
There is more than just things on the shelves;
Expectations are rapidly changing knowing in my life that these things shall always be on the shelves.
Titanium market;
20 million pounds of titanium, process if the prices were higher from 20 dollars per ton to 30 dollars a ton, then customers that use titanium would want to buy less, but how much less? It depends on how easy it is to do without titanium. Are there any good substitutes?
Wood or thin headed clubs that work wells, but it all depends on how etiquette it would be for all of it. What about digging tons of titanium? Depends on how expensive it will be to get the titanium from the ground. The shape of the supply curve changes from how it is being dug from the ground.

Demand curve will be flat if there is a change in the supply curve. If a price is at 25, then it would not be sustained because there would be a surplus and it would be brought down to 20. Suppose, Titanium can allow them to run on higher speed with a less frequency noise from passengers. Instead of it being 10 it would change to 20 millions.

Economic problem; there is not enough titanium to go around. Quantity demand would go from 16 and 10, which is a shortage. Identity the potential parties and work some type of solution. How do these things get solved? Higher a titanium Zared? What would they ahve to know to solve the type of problems?

LOTS OF STUFF THEY DID NOT KNOW IN A MILLION LIFETIMES. To solve this problem, answer the question, how much is the extra cost to get titanium? how to fill the paperwork? Labor costs? Environmental damage? First ton would happen, how would it change for the second ton? How do you store it all? It's very difficult.

Cut back as the demand curve when someone else changes in the market. New entrances come into the market, the demand curve is still the same for the consumer. The market price changes from 20 to 25, the quantity demand will be reduced by 8, so the change in quantity is equal to 2. The price is higher, so would allow others to find more units of titanium and how many producers respond to the change.How do engineers respond to it? At the intial price, they wanted 6, but they don't get it all, so they know that they will get 4 units. So the quantity change from 2 to 4, is then 2. Adding them up will be 6. 6 billion pounds are fitted away. Both came about when the prices changes. At 6 and 20, now 5 at 25 when it changes. (review video from Nov. 24th, 2011 for further information).

Surplus and Shortage; Supply and Demand (November 21st, 2011)

Supply and Demand curve in the market of acoustics:
Quantity of demand = Quantity of supply
Demand captures willingness and ability to pay.
This is where it is coordinated and how people's behaviors will to change when the prices changes.

Two questions:
How does each half of the market respond?

• Buyers and Sellers

What plans are satisfied?

• Buyers and Sellers

If the quantity is higher, when prices goes up, quantity demand decreases. Who's plan does this satisfy? Buyers!
They want the price to be high, they can try to slowly meet the demand. Given the price, they would not change the behavior.
At p= $900, quantity supply > quantity demand, by 400 sales.
When quantity supply exceeds the quantity demand does not expect the surplus, it only does at a specific price.
Quantity demand is higher, quantity price is lowered. Sellers benefit from it and buyers do not.
At $300, quantity demand > quantity supply by 400 guitars. The equilibrium point is the middle point of supply and demand.

When prices are increasing, shortages are being eliminated. Low prices can be relatively unscarse. Scarcity is the relative abundance of a good.

Two types of equilibrium:
If wood falls, supply will shift.
If electric guitars increase, demand will shift.

Rationizing under the Price System ( November 18th, 2011)

• How does it channel competition?
• Destructive
• Market economy to give goods to people. There would have been no advantage from the producers to the apples.
• Rights cannot because duties and strive as someone you don't want to be.
• Once a universal bureaucracy, you cannot understand how it will impact providers. If people want more, how will you bring "more" to everyone.
• Provide the care? No, the opposite. No investments on diagnostics and medical beds based upon that. Figured out to find the supply as there is an increase ind demand. 
• Right on ration, you allow people to do what they would possibly do to obtain a good.
• You don't have to ask in order for people to run on incentives.
• There is no vaccine policeman; we can allocate our resources ourselves.
• Moral succession does not work in society. Cheating on his exam to take the exam earlier to give it to another is to have the opportunity to get an A. Big mistake.
• Reallocation of the resources; without the price system, there is no way (signal) to demonstrate how to know who needs the water more than anyone else.
• Low demand where Ive live, high demand elsewhere to get them to gain from transaction.
• Somebody else values it more than now than before, morally bankrupt idea.
• Banning kidneys, black market is 100,000 more.
• What should determine who gets that is the safety net institutions.
• Rich and poor are no alike
• Inequality is greater today than WW1
• Is it possible to make health care independent?
• Is it always desirable?
• Why do people insit on talking about it?
• Rationalizing mechanisms and the advantages people retain when done to a price system?

 Importance of Money:
Exchanges the transaction
Leizure and the time lost
The double coincidence of wants
1/10th of a Guitar for a concert ticket.

Supply Rationing Criteria (November 16th, 2011)

Supply Rationing Criteria is what businesses can chargewhat other people value. Five fishes for 12 people.

1. Needs- Appeals instinctively but very vague because it has a who and a why.
2. Queue - first come first served. Still costly with lines.
3. The Lottery- Is it fair? It is easy to rig and may or may not get it.
4. Equal Shoves - Pure communism at a low cost or straight forward
5. Might makes Right - Fight and medical costs and planning is hard
6. Merit- deserves them for beauty, smart, and difficulty on accident.

Need is very costly. The people who need it will need to get it
The Higher the line, the higher the price

Evaluating the Rationing Mechanisms:
1) Where competition came from = scarcity. The compeititon is not in capitalism or communism.
2) Nature of competition and the destructive effort hasn't improved society from zero-sum
The constructive effort of price to produce and improve society. Still having the money if you lose and it is at a lot richer place.
What are incentives for producers to make delivery more valuable?

Supply (November 14th, 2011)

Supply Schedule depends on

1. Marginnal Cost
2. Total Cost
3. Total Revenues
4. Producer Surplus (Profits)

^ Each point is what you value at the margin for each burrito.

Marginal Cost vs. Average Cost

Supply vs. Quantity Supplied (Drawn Graphs)

Why is it curved up? It cost more to make more, which is the Law of Supply. The law of supply is not true since it has diminishing return production and spending resources.
Markets increase, capital prices increases to produce burritos.
Supply is a relationship, not a number. Particular part on the curve and it has a marginal oppurtunity cost.
Total cost is Marginal Cost 1 + Marginal Cost 2, which equals the total cost.
The total revenue is price times quantity.
Producer surplus is total revenue minus total cost, which makes profit!
Diminishing returns production
Second one counts more than the first one.

Impacts on the supply shift.
Any change in factor prices. (rent falls and it is cheaper to produce.)
Expectations matters more for the producers than consumers.
Any improvement in technology will increase the prices for producers but decrease them for consumers. If everyone is selling Pizza, instead of selling burritos. Sell pizza since it's compositional. The supply curve shifts.
n is equal to percent change in quantity supplied over the percent change of price on the good.

Market demand and market supply
Flatter or elastic
Easier to aggro supply curve. Sellers they always ask the average cost versus marginal cost to calculator price for burritos.
Prices are how we ration goods in the economy.

The Perfectly Inelastic Unicorn ( November 11, 2011)

Are there any substitutes at all for diabetes? For certain cases, better diet and better workout is the perfect substitution or prayer. Regardless of the price, you are going to buy it. The ability to want and get it is demand.
Are you going to stock up if you have the chance to be getting diabetes? At one point, yes, so demand curves will not go up and down. The inelastic curve is the same as the unicorn, if it is a myth. People are willing to spend on the market for health care.

The method of distribution and splitting the check, we would spend more on health care and have less on it in the USA. We do everything and everything for health care. Well no, if we are desperate then we would go on a high diet. There is a substitute for everything.

Income elasticity of demand:
% change in Quality Demand/ Change in Income
Normal when >0 and inferior when <0, how much my consumption changes when my income changes.

Income and Consumption vs. Prices and Consumption

Cross-Price Elasticity of Burritos and Pizza
When prices goes up, burritos goes up, pizza goes up
Subsitutes vs. complements

A small change in supply. Supply of Japanese swords increase after advertisement. If you are going to make something, then others will want it. So supply is part of the price. More likely to ride the bus than airplanes. Rizzo values his time more so the time cost is the oppurtunity cost of planes vs. the buses.

Whare are costs?
They are actions; they are tired to an action, not a thing.
To whom; Who is hearing the tradeoff?

Why does it cost more for a bicycle thana a picnic table?
Prices going to the bicycle is due to the employee is highly valued to the one that makes the picnic table.


Cutting grass by hand might be cheaper than using sheers or a lawn mower. To manufacturing the bike is cheap but the metal can be built somewhere else.
The people will have augmentations since they can be talented in such jobs.

Concepts for Supply Curves: Cost + Supply
Quantity Supplied: Amount of a good firms are willing to produce at a particular price.
Law of Supply: When the prices of a good rises, the seller of a good will make more.

Elasticity (November 9th, 2011)

Elasticity is the slope of demand. What impacts elasticity is:

1. Time
2. Budget
3. Substitution

Some people will still buy to the same amount at a higher price because there might not be a substitution for it.
Law of Demand says that over the entire range of prices, it works.
This is a too high price eventually.
Who are all the interested parties? People or businesses.
then why don't we produce changes in the large amounts? Well, because they know that some people will stop. Which has a higher elasticity?

From Minivan to the Red Form Minivan, there are more substitutes. The more narrow the product, the substitutes increases. Demand elasticity in the highest because there are more substitutes.
|n| < 1 is inelastic, people are not sensitive to price.
|n| = 1 unit elastic
|n| > 1 elastic peopel are sensitive to price

Total recipients= P x Q:
if P goes up, Q goes down and vise versa.

In the situation where A has $500 dollars and B has $320 dollars, the consumers are elastic because they are sensitive to price. Expenditures are not the same as costs.

From Individuals to Market Demand (November 7th, 2011)

Horizontal submation of total quantity demand. They will be more "elastic" when they are bought together. Change from macro demand to aggro-demand when asking the public.

Comparative Statics
Quality demand and what things impact how much we buy?

• Prices of the good in question
• "Other Stuff"

Anytime it depends on the changes, it will be the changes in demand, not changing in the quantity demand.
Changes the way people think about prices:
[Ability]

1. Income
2. Prices of Other Things

[Willingness]

1. Expectations
2. Taste Might Change
3. Number of Participants

Demands can shift in and out depends on if the demand increases or decreased and whether or not he is willing to get more of the burritos for a certain amount.

Normal Goods
When income increases, quality demand increases.
"Inferior" then quantity demand will fall. Prefrences are subjective. More of the things you like.
Substitutions (Replacement):
When the price of substitution good increases, price of burritos increases.
There is no natural paring of goods. We only substitute when viewed on the relationship of the two.
Complements (Go together):
Prices of hot sauce goes up, the decrease in consumption of burritos because f the relationship. Goods are tied together.

• Tastes and how you view things will impact the demand curves.
• If a storm occurs, the expectations is that since everyone will be getting wood and such, you may respond today to buy it.
• Expectations of the prices of substitutes may have also changed.

Elasticity: How much more!

• Demand for pencils are inelastic.
• Demand for euro vacations are elastic.
• We can measure elasticity with anything. We can also discuss elasticity through that.

Own Price Elasticity of Demand:
(% Change in Quantity Demand)/ % (Change in Price of Burritos)

Demand (November 4th, 2011)

What can be obtained from the simple chart?
Marginal values
Total Expenditures
Total Value
Buyers Net Gains which counts as the consumer surplus.

Why do we have to behave this way?
Wealth Effects
Substitution Availability
Diminishing Marginal Utility

When burritos are zero, they would be used for other ideas. You would get less of a trade off if you play baseball with a burrito.
Better to the environment to feed it to your dogs

Markets force you to consider the values of everyone else. Demand curves never go up, they act as peaks at a slope downward. Price comes at some determination and behavior of the curve.

Wealth Effects, as price goes up, you become poorer.
Less income on anything else. Increasing everything will be worst for the poor since they have no money.

Substitution Availability is buying coal or oil is bad since they increase prices. Now they will increase in your incentives for that. The prices for traffic cops since they take an advantage on our choices.

Diminishing marginal Utility
Each unit that you purchase will give you less satisfaction. I wouldn't be paying enough to get the 5th slice of pizza. You would have to go out of your way to get that type of luxury that is unneeded.

The Middleman and Demand (November 2nd, 2011)

The middle man that has a comparative advantage over something. Unique ability to bring buyers and sellers together. Wegmans is the middleman. Wegmans is going on their transactions a lot less and cheaper. They bridge the people together. Exchanges of porperty rights to things.

Demand
Exchange can occur in small groups and specific information have at that place and time.
Where does price come from? Price is information. Signals to buyers and sellers to what is scarce. This is what society values.

Markets are any group of buyers and sellers. There is also potential. Any decentralized, unorganized interaction between buyers and sellers. When you have a market, there is a production of money prices and non money prices that produce order. Order just means that stuff is on the shelves. The 2006 football crisis and it did not happen because of order.

Free health care is not free. In the United Kingdom, the 85% have to wait 3 months but for us we don't, we have 0%.

Buyers have "demanders" who have goods as households. They factor firms. Well the seller are the goods of the firms, and the factor is the households.

Demand is a relationship of the amount you wish to obtain and the sacrifices you make to get there. The quantitative demand is the amount of the good that buyers are willing to be able to consume at a particular price.

Trade Offs and the Trasactional Cost ( October 31st, 2011 )

There is a lot of people out there that can deliver that good and there is a lot of people that can have that good.

This is placed on trade offs and the bases that others have items or a use that can be viewed beneficial to others through subjective thoughts or opinions.

This is also based on the kidneys idea from Recitation. If the trade off can also value that of organs for others to use to survive at a longer time, would it be acceptable to trade a kidney for something of that of the same value.

People work for others to get their needs. For example, if others are willing to spend money on something of that of the predicted value, there is a profit that must be gained from the buyer and the seller, which is in between or bias. That is what a transnational cost does to the economy, in which it benefits the price of items sold.

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.