Scot Wick Blog

  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-...

  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...

  Hauser's Law – Top Income Tax Rate Should Be No Higher Than 19% Mostly summarized from article “There’s No Escaping Hauser's Law,” Kurt Hauser, Nov. 26, 2010: Raising federal income tax rates does not increase tax revenues. Rather it decreases both tax revenues and GDP. Per Figure 1, since the 1940s the top marginal individual income tax rate has been as high as 92% and as low as 28%. Income tax revenues as a share of GDP have averaged no more than 19%, whether income tax rates are high or low. … When income tax rates are high, people are motivated to shift, hide, and underreport income and assets. They also divert time and effort from making pro-growth productive investments to seeking tax shelters. Tax shelters include offshore tax havens and tax-exempt investments. This behavior reduces economic growth and job creation. … So, the conclusion is it’s better to have lower income tax rates. Then more money invested rather than sheltered. Lower tax rates, ideally no more than 1...

  Fumiko Scot's information: Weight at 165 pounds, got to 160 pounds five years ago and have recently been bouncing between 163 and 168. Common sense ways to lose and keep off weight are eat right and light and get lots of exercise. Main exercise is walking, do 1~2 miles most days. Over career worked as a salesman in the steelmaking, fasteners, and auto manufacturing industries, lots of travel in U.S., Canada, Mexico, and Japan. Have visited every U.S. city with a major league, MLB, NFL, NBA, NHL, sports team except Sacramento, have gotten as close as Travis Air Force Base. Often traveled on Sundays, much time on the road so could not eat right and get enough exercise so got heavy, up to 200 lbs. Was on commission and made enough to retire early, now eat right and light, and get enough exercise. Now am spending most time reading and writing. Our Wick branch goes back to the brother of owner of the Wick House at Morristown National Historical Park in Morristown New Jersey, and on ba...

  “The world we see that seems so insane is the result of a belief system that is not working. To perceive the world differently, we must be willing to change our belief system, let the past slip away, expand our sense of now, and dissolve the fear in our minds.” - William James “All experience has shown mankind are more disposed to suffer, while evils are sufferable, than to right themselves by abolishing the forms to which they are accustomed.” - Thomas Jefferson “Wherever good fortune enters, envy lays siege and attacks it. And when it departs, sorrow and repentance remain behind.” - Leonardo da Vinci “Struggle is the indispensable accompaniment of progress. If men were entirely social, man would stagnate. A certain alloy of individualism and competition is required to make the human species survive and grow. Without qualities of an unsocial kind men might have led an Arcadian shepherd life in complete harmony, contentment, and mutual love. But in that case all their talents wou...