Scot Wick Blog

  From collection, result of one of hobbies, have created over 40 - doll clay sculpted augmentation. These are ideas for future full-sized full-motion pure pleasure companions, virtually, then later physically… “Mari”

  Comparative Advantage Even if a person or country is not best at making anything, they can still produce and prosper. … Mostly summarized from the Mankiw book: Suppose LeBron James can mow his lawn faster than anyone else. Should he mow his own lawn? James can mow his lawn in two hours. In that same two hours, he could film a television commercial for Nike and earn $50,000. … Dave, a boy who lives nearby, can mow James' lawn in four hours. In four hours, Dave could work at McDonald's and earn $60. James has an absolute advantage over Dave in mowing lawns because he can do the work in a smaller amount of time. But Dave has a comparative advantage in lawn mowing, because · James' opportunity cost of mowing the lawn is $50,000, not making the Nike commercial · Dave’s opportunity cost of mowing the lawn is $60, not working at McDonalds Rather than mowing his own lawn, James should make the commercial and hire Dave to mow the lawn. As long as James pays Dave more than $60 and...

  Mostly summarized from Gregory Mankiw’s Principles of Economics, 5th Ed. PART 7 Topics for Further Study Chapter 21 of 36 The Theory of Consumer Choice Section 6 of 26 … Because indifference curves show a consumer's preferences, they have properties that reflect those preferences. Next, we consider four properties of indifference curves. Property 1 - higher (farther right) indifference curves are preferred to lower ones Property 2 - indifference curves are downward sloping Property 3 - indifference curves do not cross Property 4 - indifference curves are bowed inward … Property 1 – higher (farther right) indifference curves are preferred to lower ones This is because people usually prefer to consume more goods than less. Figure 2 higher indifference curve I2 shows one can buy larger quantities of goods than lower indifference curve I1. Higher income or lower prices allows movement from I1 to I2. … Property 2 - indifference curves are downward sloping The slope of an indifferen...

  Mostly summarized from Gregory Mankiw’s Principles of Economics, 5th Ed. PART 7 Topics for Further Study Chapter 21 of 36 The Theory of Consumer Choice Section 5 of 26 … Because indifference curves are not straight lines the marginal rate of substitution is not the same at all points on a indifference curve. The rate at which consumers are willing to trade between pizza and Pepsi depends on · whether they are hungrier or thirstier · how much pizza and Pepsi they are already consuming … Per Figure 2, starting at combination C · to move from combination C to combination B, must give up 100 pints of Pepsi to have 30 more pizzas · to move from B to A, must give up 50 pints of Pepsi to have 60 more pizzas The consumer is equally satisfied at all points on any given indifference curve. … Because consumers prefer more consumption to less, higher indifference curves are preferred to lower ones. A consumer can move to a higher indifference curve either because their income has gone up ...

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  Mostly summarized from Gregory Mankiw’s Principles of Economics, 5th Ed. PART 7 Topics for Further Study Chapter 21 of 36 The Theory of Consumer Choice Section 4 of 26 … Figure 2 - The Consumer's Preferences¬ The consumer's preferences are represented with indifference curves These show the combinations of pizza and Pepsi that equally satisfy the consumer. Because the consumer prefers more of a good, points on the higher I2 indifference curve are preferred to points on the lower I1 indifference curve The marginal rate of substitution · measures how much Pepsi the consumer requires to be compensated · for a one unit reduction in pizza consumption … Here we consider how consumers make choices. The budget constraint of the previous section is one piece of the analysis. It shows the combinations of goods the consumer can afford given his income and the prices of the goods. The consumer's choices depend on · his budget constraint · his preferences for the two goods … A con...

  Minimum Wage Increases Mandated by Government Are a Lose-Lose-Lose for Workers … Most economists believe the demand for labor is elastic, with a relatively horizontal labor demand curve, as in Figure 1. This means a 1% increase in wages causes a more than 1% number of workers not demanded by employers … Lose #1: The minimum wage increase from wage A to wage B, results in a decrease in number of minimum wage workers employed, moving from D to C. At higher minimum wage B they are largely replaced with: · higher value workers including college students, retirees, and housewives who before thought the free-market minimum wage was too low to want to get a job · increased automation, previously more expensive than the minimum wage … Lose #2 Likely there is a decrease in total wages for those who remain employed at new higher minimum wage. With natural free-market equilibrium wage A, total wages earned by all minimum wage workers is the rectangular area AED0. After the newly government-...

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  Mostly summarized from Gregory Mankiw’s Principles of Economics, 5th Ed. PART 7 Topics for Further Study Chapter 21 of 36 The Theory of Consumer Choice Section 3 of 26 … Figure 1 - The Consumer's Budget Constraint The budget constraint model shows the various bundles of goods the consumer can buy for a given income. In this model the consumer buys bundles of pizza and Pepsi. The table and graph show what the consumer can afford if his income is $1,000, when · the price of pizza is $10 · the price of Pepsi is $2 The consumer can buy 100 pizzas and 0 pints of Pepsi, or 0 pizzas and 500 pints of Pepsi, or any combination between. … Most people would like to increase the quantity and quality of the goods they consume. People consume less than they desire because their spending is limited by their income. In Figure 1, we consider the decision facing a consumer who buys two goods, pizza and Pepsi. This model assumes there are only two goods simplifies the model but doesn’t alter the...

  Mostly summarized from Gregory Mankiw’s Principles of Economics, 5th Ed. PART 7 Topics for Further Study Chapter 21 of 36 The Theory of Consumer Choice Section 2 of 26 … Because we each have limited financial resources we cannot buy everything we want, therefore we · consider the prices of various goods · then buy a combination bundle of goods that best suits our needs and wants Here we will develop the theory of consumer choice, which gives insights into how consumers make buying decisions. … Previously we have summarized consumers' decisions using the demand curve. The demand curve for a good reflects consumers' willingness to buy. When the price of a good rises consumers want to buy fewer units, the quantity demanded falls. Here we will look in more detail at the decisions that create the demand curve. … Restated from Chapter 1, the Ten Principles of Economics: 1: people face trade-offs 2: the cost of something is what you give up to get it 3: rational people think at t...

  Mostly summarized from Gregory Mankiw’s Principles of Economics, 5th Ed. PART 7 Topics for Further Study Chapter 21 of 36 The Theory of Consumer Choice Section 1 of 26 … Chapter 21 The Theory of Consumer Choice - Topics The Budget Constraint: What the Consumer Can Afford Preferences: What the Consumer Wants Representing Preferences With Indifference Curves Four Properties of Indifference Curves Two Extreme Examples of Indifference Curves Optimization: What the Consumer Chooses Utility: An Alternative Way To Describe Preferences and Optimization How Changes In Income Affect The Consumer's Choices How Changes In Prices Affect The Consumer's Choices Income and Substitution Effects Deriving the Demand Curve Do All Demand Curves Slope Downward? The Search for Giffen Goods How Do Wages Affect Labor Supply? Income Effects On Labor Supply How Interest Rates Affect Household Saving … … ChatGPT: Summary of Chapter 21: The Theory of Consumer Choice, Mankiw, Principles of Economics...

  Mostly summarized from Gregory Mankiw’s Principles of Economics, 5th Ed. PART 6 The Economics of Labor Markets Chapter 20 of 36 Income Inequality and Poverty Section 20 of 20 … The ancient Greek philosopher Plato postulated in an ideal society the income of the richest person would be no more than four times the income of the poorest person. Our society has much more inequality than Plato recommended. One of the Ten Principles of Economics: governments can sometimes improve market outcomes. There is little consensus about how this principle should be applied to income distribution. Philosophers and policymakers of today do not agree on how much income inequality is desirable or even whether a goal of public policy should be to alter income distribution. Whenever taxes are raised lawmakers argue about tax progressivity, how much if any the percent tax rate should go up as income increases. Another of the Ten Principles of Economics: people face trade-offs. Policies that penalize t...