Thanks Alex!!!!
I dedicate this post for you bro haha and well last day of classes is tomorrow so I am pretty exited for that and gettin ready for finals.
Go Economics!
Monday, 12 December 2011
Class #42 "The Last Class of the Semester" (12/12/11)
What is Interest? Just another price set by supply and demand for credit
- Emerges from desire to have purchasing power at a time when you don't have it on your own.
-We are willing to pay a price for obtaining unearned resources.
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Profits are what is leftover.
Two types of profits.
1) Accounting profits: Revenue - costs(Explicit)
2) Economic Profit: Revenue - Implicit costs(Opportunity Cost: forgone rent, wage, interest, ect.) - Explicit Costs
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-Profits and Losses are signals.
-Profits are a signal that you are making good decisions, Losses are signals that you made bad decisions.
"Capitalism makes you pay for sucking" - Rizzo
Why losses need to be allowed:
-Losses are destroyed/wasted resources. So when a company is allowed to operate in a loss (i.e. subsidies) resources are being wasted.
-By taking away the potential of a loss, you risk less, so investors back by government take unsafe risks knowing their are big potential rewards and little potential loss.
-When losses are allowed there are no feedback systems. Losses mean your are doing a bad job, but government entities (USPS, AMtrak) operate at losses, and have have no reason to improve.
- Emerges from desire to have purchasing power at a time when you don't have it on your own.
-We are willing to pay a price for obtaining unearned resources.
------------------------------------------------------------------------------------------------------------------------------------
Profits are what is leftover.
Two types of profits.
1) Accounting profits: Revenue - costs(Explicit)
2) Economic Profit: Revenue - Implicit costs(Opportunity Cost: forgone rent, wage, interest, ect.) - Explicit Costs
------------------------------------------------------------------------------------------------------------------------------------
-Profits and Losses are signals.
-Profits are a signal that you are making good decisions, Losses are signals that you made bad decisions.
"Capitalism makes you pay for sucking" - Rizzo
Why losses need to be allowed:
-Losses are destroyed/wasted resources. So when a company is allowed to operate in a loss (i.e. subsidies) resources are being wasted.
-By taking away the potential of a loss, you risk less, so investors back by government take unsafe risks knowing their are big potential rewards and little potential loss.
-When losses are allowed there are no feedback systems. Losses mean your are doing a bad job, but government entities (USPS, AMtrak) operate at losses, and have have no reason to improve.
Rizzo
-Daniel Gaona
Sunday, 11 December 2011
EWOT Goggles #14 "Dinning Halls" (12/11/11)
Let´s make a strategy to make Dining Halls less intense....
The dining halls can get insanely crowded during peak hours. Everyone wants to eat during dinner time, and that is generally between 530-730. As the school expands, as it plans too, one of the issues will be the availability of space in these dining halls that are already packed. Most likely they will build more dining halls. But I argue that the school system could expand significantly and survive easily with the dining halls we already have. Right now, no matter when you go it costs the same. Instead the school could charge more for meals at the peak hours. This would discourage many people to go during the peak hours and even out demand throughout the day. By forcing the price to stay the same, the school is creating shortages in some hours and huge surpluses in other hours. Instead they could charge different prices at different times to even demand out. Another case of the forced and arbitrary setting of a price with no respect to the relevant supply and demand curves.
The dining halls can get insanely crowded during peak hours. Everyone wants to eat during dinner time, and that is generally between 530-730. As the school expands, as it plans too, one of the issues will be the availability of space in these dining halls that are already packed. Most likely they will build more dining halls. But I argue that the school system could expand significantly and survive easily with the dining halls we already have. Right now, no matter when you go it costs the same. Instead the school could charge more for meals at the peak hours. This would discourage many people to go during the peak hours and even out demand throughout the day. By forcing the price to stay the same, the school is creating shortages in some hours and huge surpluses in other hours. Instead they could charge different prices at different times to even demand out. Another case of the forced and arbitrary setting of a price with no respect to the relevant supply and demand curves.
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