Class 4 9/9/2011

In today's class, Professor Rizzo started off by restating the difference between micro and macroeconomics. Microeconomics is analyzing individual choices. Macroeconomics is the study of the unintended consequences. Micro also analyses people who want the product. An example of macro relating back to the kidney story from last class would be the shortages caused by people not being able to sell their kidneys. It was said that the president has no control over what happens in the economy. No matter how great of a decision is made, unintended consequences always happen. 

McDonalds is a consumer desire that tends to cause many Americans to be overweight by over indulging in this healthy food. The biggest difference between foods today and foods in the 1950’s before fast food was around was price. Food is much cheaper today causing people to eat more of it. This also leads to obesity. Due to better health care systems, the cost of being unhealthy today is lower than it was 50 years ago. It also doesn’t help that recent evidence has shown that being a little over weight is better than being a little under weight. New York has tried to ban soda from the city thinking that this will decrease the obesity of people in the city. The elimination of soda will only reduce obesity by 1% only. Economists study everything in life. Economics are good in society because they know how processes work when working well. This is good because when things are going bad, economists can identify causes of why they don’t work well. Their job is to keep order. There is so much order in humanity that when disorder occurs, it seems chaotic.

We study economics because mankind has a sense of wonder about stuff. We are awed by the world around us. Studying facts and concepts are important. Appreciating miracles is an interest to us because it brings hope about what the future contains. It’s amazing to think about the amount of different inventions to occur on order to get music onto the computer.  Trade offs occur everywhere.  It is said that the road to hell is paid with good intentions. Intensions do not equal results.

The discussion of the endangered species act came up in class. The act was made to keep people from killing endangered species, but the act only hurt these species rather than help them. Animals like an endangered wood pecker cause homeowners in North Carolina to clear land so that the wood pecker can not reside in their yard. If one does make a nest in someone’s yard, it is likely that that person will move the nest elsewhere so that they don’t have to deal with the regulations that come with the bird. Nixon was the one who wrote the act.

Right now we are many times richer than we were in 1900. If we grew at China’s rate of growth, right now the average person would make 22,000,000 a month. Education is something that is discussed as needing more funding towards it in America. Right now the US spends between 200-250 billion on our education systems k-12. We need an anchor for economics. If we boiled water at 3500 degrees farenheit, this would be extremely inefficient because much more expensive equipment would have to be purchased in order to boil water. Only 2.3% of workers in the US earn minimum wage. This is much higher than it was a few years ago. A stat that goes along with this is that only half of Americans are in the labor force. If minimum wage were a good economic policy, it wouldn’t help the people earning it, just the employers.

Economic systems are complex. The reason that no one wants to hear supply and demand and scarcity is that it is not an exciting topic to talk about. People have a hard time appreciating unplanned order. Also there are two categories in economics. Type consequences uses the scientific part of the brain. This raises questions of “what happened.” The motives uses the emotional part of the brain where the person is thinking who did it.

I met with my TA in recitation for the first time today. His name is Michael Dymond and his email is Mdymond@u.rochester.edu