EWOT #9

My EWOT this week is about the unintended consequence of a decision that the school made for Rizzo. (regulating). The school told Rizzo that he had to have open office hours this week. I went in earlier when he wasn't in his office and saw that it was only walk ins this week. When I then went the next day, there were 10 people lined up at his door. I instantly turned around because I did not have the time to wait. This long and unorganized line was an unintended consequence of people guessing when they would have a good chance to see him rather than knowing when a good time to go was based on when they signed up. This long line wasted a lot of time for people that were near the end of the line. They could have been using this time to do more productive things but instead were waiting in a long unnecessary line. Others like me who couldn't wait in the line missed out on an opportunity to talk to Rizzo that we would have had if he had sign up office hours. Not only does this example show how unintended consequences work, but it also shows that regulation is bad for a free market economy.

Class #25 10/31/2011

Rizzo started off class by saying that the trade deficit and the federal budget deficit both don’t always mean debt. Only sometimes does it. Usually it’s more of the federal budget deficit meaning debt than a trade deficit but it is not always this way. Debt is okay if your using the money to be more productive in the future. Trade accounts are in balance. They are always perfectly balanced for nations as a whole.  They cant take the form of other countries purchasing our debt.

American government securities are what Japan and China purchase from us. China does well by buying 1 billion in American treasury returns. When these countries buy American securities, it keeps the interests rates lower in America. People are very hypocritical when they say that selling our debt to other nations is bad. There is no difference whether China trades us for bricks to give us money, or gives us money to pay for the bricks in a building. Both are trades that we lose something in order to get something. It doesn’t matter who you trade with. North Carolina sells more stuff to other states than they buy. S.C is the opposite. If both of these states left the union tomorrow, their trade statistics would stay the same. It doesn’t matter who we trade with. The trade deficit means nothing.

Trade statistics aren’t meaningful entities. A Philly design school built a suit by searching for materials only within a 100 mile radius of Philly. Took 500 man hours to produce it. By producing it locally, took $10,000 of material and labor. 8% of the material came out of the 100 mile radius. If they made it from totally within the 100 mile radius, it would have cost $600,000 and taken 1.5 years. 

Whirlpool has 1,000 workers in Tennessee. Every job loss devastates that worker and each employee costs $100,000 a years. We know alcoholism and divorce rates increase in recessions. $100,000,000 total costs of program saved. Assume none of them find a job again. By doing this, products are $2 cheaper. Gain is $120,000,000 but loss is $100,000,000. $20,000,000 net gain. Consumers don’t realize a $2 difference. Where is the line drawn where trade matters. Would the decision if rather than outsourcing to India, went to greener Ohio. What if it was lifesaving drugs instead of whirlpool. We forget about the benefits that Indian workers would get for getting outsourced jobs. Indian workers would benefit more since they are poorer than people in America. Still helping the world. If we truly cared about the poor, we would outsource our services to India. This is not factored into American trade. We only look at America and not world. Benefit poor in India more than we hurt the poor in America. The $2 benefit is worth nothing to Americans. Satisfaction gained is swamped by the sadness of people who are fired.

If Rizzo got $1 from every American, he would get $310,000,000 to go great things with. Nothing is unique with international trade. Other countries have lower labor standards than the US. Businesses are attracted to other countries because it is cheaper there from lower standards. No correlation between environmental quality and labor standards when trading. If this was the case, we’d produce everything in Mississippi. We’d build stuff in the Ivory coast if this was the case. Nations with the highest environmental standards attract the most trade. Trade occurs between industrialized countries. 2% of firms costs to go to environmental standards. Everything has to be right for countries to invest in other countries. Trade leads to more environmental consequences. We produce things in places that have lower environmental impact. Wheat belt in Canada makes wheat a lot more efficient so we don’t have to fill Maine with wheat. Trade makes things cheaper. More money in the budget from this allows us to spend more on the environment. A 10% increase in income makes a 20% increase on money spent on the environment.

Low wage exploited labor. People think this is why China is attractive. Slavery in agriculture, not in industrialized places. Why isn’t China more productive under Mao then they are today when workers were exploited more.

Trade is beneficial because of Smithian nations and Recardian nations.

Smith- 1. When we specialize we spend less time at the job learning aspects of everything. We learn certain tasks better. 2. Allows us to develop knowledge and apply capital where we haven’t before. Rizzo knows more about Econ by not having to learn chemistry to teach as well. Makes sense for power points in class because of the amount of people he teaches at once.

Ricardo- Comparative advantage- specialization and trade lowers cost. Can do things cheaper.

If you put the Ricardo and Smith ideas together, and it shows why trade is great.

In economics, having people value things differently is needed for trade to happen. The world has a massive amount of TRANSACTION COSTS.

Baseball card trade- trade property rights to those products.

Transaction costs-costs of negotiating the trade and agreement. Has to help buyers and sellers overcome

1.   physical costs- distance between people was a big barrier prior to the internet. The internet took this barrier away.

2.   Ignorance of opportunity- Don’t need to know all opportunities in market economy. This is due to search costs.

3.   Interference- Barriers and laws. Ex. People need a license to cut hair. 

HW #8 Econ 108

A.
In the Dirty jobs talk, it was interesting to see how one experience completely changed the speakers opinion of life and how things work in it. This experience was him learning how to castrate lambs and how the technique that looked more inhumane and more abusive to the animal actually was the better technique for the animal and made the suffering a lot less prolonged. He described this event as anagnorisis(discovery) and parapatilla(realization). This particular show changed the way that he thinks of the people the people that he does his show on. I was shocked to hear that the people with these dirty jobs are gnerally very happy with their life. Also Rowe said that the advice of following your passion is awful advice. I was also shocked to hear him say that safety comes third, not first when it comes to jobs. I was not  shocked to that fewer people that have jobs of carpenters, plumbers ect. are seen every year. I agree that jobs aren't going to stick unless they are jobs that people want. We've learned this in economics class as well.


 In the Long Live Roquefort video, A restaurant owner talks about how by Clinton putting a 100% tariff and bush increasing that tariff to 300% on roquefort cheese from France, she can't sell it anymore because of the governments actions. This tariff hurts her business because she now can't see a product that she sold in the past. This takes away from both her and the consumers. It was interesting to see how the governments actions of regulations affected this one person enough where she would start a protest against the tariff. 


In the cigar video, it talks about how people used to have the job of a lector at factories. This person would read the news, current events, and novels to people when they worked. This relates to class of technology replacing jobs because this job is no longer around anymore but was an important job at the turn of the century. I didn't realize how simple certain jobs were at one point in time. All this person had to do was be able to read and write and the immigrant factory workers looked up to him for this. 


B.
1. Why do you think it took Rowe so long to learn this new meaning of life? How has he done other jobs of similar animal abuse, abusiveness, and inhumanity, yet this one particular job of castration was the one that changed his thinking on life.


2. What causes the government to put these tariffs on products? Is there any good that comes out of the tariffs economically compared to how things were before the tariffs were put into play. 


C. 
The dirty jobs segment by Jeff Rowe discusses how his segment on lamb castration changed his way of thinking about life. He talks about how a tragedy is when a person comes face to face with his true identity.  He learns that we have created a civil war on our own society. He talks about how innovation without imitation is a complete waste of time. By this he means that if you can't replicate your innovation and be able to know how it works, than the innovation is useless to society. He later talks about how safety should be third not first. He learned this when he was on the set of deadliest catch. He went to the captain and mentioned OSHA due to the dangerous waves, and the captain responded “im the captain of a crab boat, responsibility isn’t to get you home alive, get you home rich. If you want to get home alive that’s on you” This made him realize that to be successful, sometimes you have to put your self interests ahead of your safety. 


In the long live Roquefort video, the Clinton and Bush administration put tariffs on Roquefort cheese in retaliation to the French not buying America's hormone fed meets. This move hurt both her business because after a while, she was no longer able to sell Roquefort cheese due to its high price. The consumers were hurt because the people who enjoyed Roquefort cheese in the past, can no longer enjoy it in the future due its limited availability from the increase in price. This is also bad because it will hurt our trade with France. This will make our relations with the country not as strong as well as limiting the wealth of our nation from restricting cheese. Both vendors and consumers can not make free choices because of this tariff. 


In the cigar video, it talks about how a person with the job of a lector used to sit on a pedistool in factories and read the news, current events, and novels to the immigrant workers. They admired this person from his ability to read and write. This job is no longer available because technology and advances replaced him. Other jobs most likely opened up due to these advancements though, so the country is getting richer from the increase in technology that replaced the lector. 

Class #24 10/29/2011

 Rizzo started off the class by talking about how no one wants to ban technology from the job loss that it creates, but they want to limit trade. He then talked about how other countries have lower wages than the US and that wages have increased by 100% in China over the past 8 years. When comparing businesses and if one should trade, both the absolute advantage and the comparative advantage matter. These stats matter to us if we want to outsource a job to a different country. If China assembly line workers make $8 an hour and can produce 4 units in that hour, than there is a charge of $2 a unit per hour. If the US pays $30 an hour and produces 20 units, then the use charges $1.50 per unit. We have to divide the wage by the marginal product of labor (how much more stuff can you get to work another hour at work. Specialization and trade are used to higher wages. Wages in China have been going up very fast over the past few years. The increased wages in China do not mean that trade is going to come back to America.

       Globalization allows worker in their countries to increase their productivity. The ability to produce and wages both matter. They are an opportunity cost. Patterns and trade are both determined by Wages/marginal product. We won’t notice an increase in GDP from Chinese tariff. Regulations are often costly but sometimes have to be done. If trade deficits destroy jobs, then shouldn’t we create jobs with trade surplus? NOPE. Statistics show that jobs have decreased with both trade deficits and surpluses. We currently have half the number of farmers that we did in 1950, but we are producing 3x the amount of food with the same amount of land.

      

1. People pay for imports with exports. 2. When we specialize, we get richer. It allows us to consume more and it also creates jobs. This makes us richer. The same jobs are created in the exports sector that we lose in the exports sector and vice versa. When you put these two things together, we get more money. Rizzo currently has a trade deficit with Wegmans and a trade surplus with the U of R. After Rizzo retires, neither the U of R or Rizzo or Wegmans is going to try and collect further money. Free television has made HBO more profitable because people like a variety of things that they can watch. If North Korea gave every American a free $6,000 car every 4 years, then each person will have $6,000 that they can spend on something else. This will create jobs in these other industries. We replace products with better products. The car industry in America will not fail though because everyone has different preferences so people will still buy other cars. If Rizzo buy a new Iphone the trade deficit with China is worse by the $829 that it costs. In reality it is less, because only certain parts are made in China and not the whole phone itself.

Jobs are a cost. We support trade because data shows that trade creates jobs. When we trade with others, different trade opportunities creates more jobs. International trade is great because it promotes peace between the different countries. Machines cost more jobs than trade does. Mathematicians were scared that a math book would put them out of business, in reality it helped progress mathematics by allowing mathematicians to further their research and make new equations by being able to learn the previous material faster.

Trade account- G and S. We sell to buy

Capital account balance- Is related to the trade deficit.

Capital account surplus allows us to consume more than it produces. American assets are very attractive to people. Any dollar that Rizzo spends will get back to him. If I buy $10 in toys from China and a person in China buys $5 glasses from me, the current account balance is -5. The $5 we lose can buy more American goods for foreign countries as well as buy an American asset. Trade deficits are good. By reducing the amount of money in the US, you increase the wealth in America for everyone by the amount that isn’t there. If Rizzo rips a dollar bill, everyone is richer by $1. US capital account balance and US current account balance is 0. If we buy a foreign car, they will use this money to put back into the American economy. 

Class #23 10/26/2011

Rizzo started off class by saying that as long as he specializes in things he’s god at and we exchange, the world becomes richer. When we trade, we reduce the costs by taking advantage of people machines. People say that trading with other countries loses jobs. Jobs going away are gone because we economized. These jobs suck. Jobs we lose suck. Jobs today are high sectored jobs. It causes an increase in income technology in America. Technologies today enrich people who have skills for them. 100 years ago, we could make everyone productive. Advances today only make us better. Jobs that go away come up somewhere else in the economy that are created economizing (who in the 1900s thought there would be jobs as auto mechanics) No one thought a car would be imported when they first came out. Nuclear engineer jobs, website designers, no one knew that these jobs would happen until they did. We have to constantly change our specializations. Constant retraining is needed. Trades do have costs. People who lose their jobs from trade are distinguishable to 0. Every year 4,000,000 jobs are created and destroyed.

People who lose their job to trade, benefitted from them initially. Cost of sustaining unemployed is easier than other countries and in the past. The more risk to keeping a job, the higher the wages are for that job. If we want to argue that trade costs jobs, technology is the biggest job destroyer in history. A person used to get paid to open the door of an elevator. Now no one has this job. Technology kills jobs by a factor of 40 over trade. We need to match people’s skills with needs out there. If we buy more than we sell, this is a trade deficit. If we sell more than we buy, this is a trade surplus. Trade statistics are meaningless. The US buys more from abroad than they buy from us.

The US total employment continues to rise over time. Recessions have an affect on employment. There are less jobs because of it. There have been 51 million jobs created since the trade deficit started. Trade deficit affects types of jobs you see distributed in an economy. Manufacturing has gone down since the deficit. Rizzo thinks that it is not coming back up. A share of the total employment manufacturing has plummeted. We’ve been losing manufacturing jobs since WW2 ended. This was before the trade deficit started. Manufacturing output has increased drastically over time. We produce more than every country except China and Japan. We have six times the manufacturing output than 1959. Globalization doesn’t make us poorer. Increased productivity because we are producing more with workers and more machinery than ever before. People today on an assembly line produce $300,000 worth of stuff. Machines work more efficiently than people.

Workers are more educated and productive today than ever. Savings from higher productivity goes to lower prices. Higher productivity doesn’t mean higher profit. Only non increase in productivity is health care and education. How can this class be more efficient. It is hard to see how a doctor can do more than one surgery at a time. This is the future. When it’s cheaper to make new clothes and jobs, we need more resources. We create jobs to get these extra resources. Rizzo’s gas bill was down 30% last year. This is 30% more to spend on other stuff. Jobs come from increased productivity.

In 1985, there were 60,000 ATM’s and 485,000 bank tellers. In 2008, there were 600,500 tellers plus 152,900 ATMs. These tellers now have more time to do other things. They are more productive due to ATMs. New machines compliment high skilled jobs. They also replace low skilled jobs. Computers make radio announcers more productive with the easier access to information that they can deliver over the air. 

EWOT #8

My EWOT for this week is about something that happened in lecture. Professor Rizzo had the door open to outside to get some cool air flowing through the class, and some girl asked him if he could close the door. Rizzo did, and in doing so made a bad economic decision. By closing the door, he was not acting in his own self interest because he personally wanted the door open. Also, this girl may have been the only person in the class that wanted the the door open, so the other hundred students would be affected negatively for one person's benefit. This is like Rizzo's bus example where a bus driver shouldn't wait for Rizzo at the bus stop because he doesn't have enough knowledge of the other people on the bus to know if it would be economical to wait the extra minute for Rizzo to get to the bus. What Rizzo should have done was taken a quick class survey to see what he should have done with keeping the door open or not. Though this would take time, it would teach the class a lesson and prove the point that when once acts in their own self interest, it is for the better of the economy.

Class #22 10/24/11

Rizzo started class by giving us a bunch of charts and talking about comparative advantage

Rochester	Rochester	Cornell	Cornell
Wine	Cameras	Wine	Cameras
10 bottles a yr	5 cameras a yr	5 bottles a yr	4 cameras a yr

In this graph, Rochester is better making both cameras and wine. The production possibilities frontier for these structures look like.

butter is replaced with cameras on the X axis and guns is replaced with wine on the Y axis. The X axis is touched at 5 and the Y axis is touched at 10. Cornell’s would be the same except the 5 for cameras would be a 4, and the 10 for wine would be a 5. Any region the the northeasy of the line is unattainable for both Cornell and Rochester at this time. These graphs show the production possibilities of Rochester vs. Cornell.

	Rochester	Cornell
Cost of Cameras	5 cameras cost 10 wines. 1 camera costs 2 wines. Produce what we value	4 cameras costs 3 wines. Price of camera at Cornell is ¾ bottle of wine
Cost of Wine	10 wines cost 5 cameras. 1 bottle of wine costs .5 cameras	3 wines=4 cameras 1 bottle of wine=4/3 of a camera

Rochester is least opportunity costs provider at making wine. That means that they are more efficient at doing it than Cornell. Rochester has a comparative advantage in making wine over Cornell. Cornell is better than Rochester at making cameras. They have a comparative advantage in this.

	Rochester	Cornell
Initial	10 wine, o cameras (trade 3 wines from Rochester for 3 cameras from Cornell)	0 wine and 4 cameras
Final	7 wine and 3 cameras	3 wine and 1 camera

Rochester students have the absolute advantage over Cornell in making cameras and wine.

A good economic question to ask is who is more efficient at making each? Efficiency means trade offs. Opportunity cost is price. We ask who can produce wine and cameras at a lower cost. Who sacrifices the least to make wine and cameras? Price is a trade off. Comparative advantage asks how good you are at making something. Something really important is that NO ONE CAN HAVE COMPARITIVE ADVANTAGE OF EVERYTHING BY LAW. Because you have comparative in one thing, you can’t have a comparative advantage in another thing. IF Rochester and Cornell exchange, both parties become richer.  After the trade, there will be a point to the northeast of the initial production possibilities frontier. This makes both Rochester and Cornell better off so the trade was a good trade. We know that they want to trade if you can sell something for more than it costs to produce (profit). Buyer buys they can get it for less than it costs for them to produce it. If someone can make something for cheaper, than the interest of trade happens.

¾ bottle of wine < price of camera < 2 bottles of wine

If the trade for cameras falls between these two numbers, than it makes sense to trade. Something interesting is no one can figure out an exact price of something through economic predictions, just a range of prices. Both people can be more efficient by not being self sufficient. Being social increases the wealth of all trading parties. Trade is a non-technical form of production. It makes people richer by shuffling things around. Trade allows us to use fewer resources. Living standards improve with the more people we can trade with. If there were 100,000 people in the world only, not nearly as many products as there are today. The more people the better in terms of obtaining products you want at the cheapest price.

Self sufficiency is the road to poverty. The more people, the more specialization that occurs. Both Rochester and Cornell exported and imported their products. We pay for imports with exports. Every export buys an import. Specialization makes all parties better off.

Absolute advantages say nothing about wanting to trade. Relative prices within each country determine trade. Restricting trade is costly. Nothing is free. The US is one big free trade zone which is why we are so much richer than a lot of countries.

Prices are 8%-40% lower because of Wal-Mart’s competition. Saves $263 billion a year in the US. Wal-Mart in reality saves us a lot of money. Free trade between states has closened the gap of average income between states in the US. 

HW#7 Econ 108

A.
 An example of altruism  that was interesting to me was the one about saving a stranger child who is drowning over your own.  This document talks about how a truly altruistic person would decide to save another child over one's own. I doubt that anyone on the planet would want to save another child who is a stranger over their own. This example I found very interesting and proved the document correct that no one is the world can be completely altruistic.

Another thing that I found interesting was how individualism is beneficial to our society. The document explains well how thinking in one's self interest actually benefits all because it spurs more production and exchange. This changes how I think in that when I look at someone as greedy in my terms, maybe they aren't greedy at all. An example of  this would be that if someone doesn't donate to foundations and charitable causes, maybe they shouldn't be called greedy, because they might spend that money somewhere else creating economic growth that would help more people than by donating his money to charity and good causes. Maybe the person who donates money to charity is greedy because he is looking out for the well being of people who he believes are more important and need that money, when in reality it might help society more if the money went elsewhere.

B.
1. Are there societies that are completely altruistic? If so, how are they doing as a society?
2. If our world was completely altruistic, would we be as productive as we are now, or would we be better or worse off?

C.
This reading discussed the meaning individualism vs. altruism. It starts off by talking how the morals of the market economy cause us to benefit others, but this isn't the case because we intend to do so. It talked about how we benefit other because the market makes us act in a way that allows extended order to take place benefiting each other. Extended order is what happens when a system embraces specialization and trade making an information gathering process that know one of higher power can know how to obtain.

The reading then talked about how our moral obligations extend only to our own values. If I donate money to charity, I am not doing this as an altruistic action, but because of my values. Maybe I value human life making it in my best interest to donate money to charity.

The reading later talks about how to obtain wealth I have to produce and trade. This would benefit everyone else in the economy. This shows that one tries to act in his or her self interest, they are being altruistic even if they didn't intend to be. The document then talked about how altruism rejects private property. We learned in class though that property rights are necessary to economics because it gives people an incentive to work harder and produce and exchange more which improves societies.

Class #21 10/21/11

 Rizzo started class by saying that trade creates wealth.

Explicit act of trade creates nothing new at all, but creates more wealth.

Kirby Puckett was input into producing a complete set of baseball cards. Trade is a non technical form of production. If its cheaper to to get the good, then people will do it.

Usually when goods are exchanged, some things can only be produced if you exchange resources across the planet.

China is the leading producer of rare earth metals. Trade sets stage to make world richer. Technical parts of production aren’t possible without trade in the first place.

The source of wealth was because people have goods that people don’t value as much as other people value them.  Professor Rizzo gave an interesting example of showing efficiency. Mike and rich are neighbors that work on their own lawn and take a certain  amount of time to do things as depicted below.

Task	Mike	Rich
Weeding	80 mins	120 mins
Mowing	40 mins	120 mins
Total	120 mins	240 mins

If Rich offeres to weed ¾ of mikes driveway if Mike cuts his grass, then Mike mowes for 80 mins and weeds for 20 mins which is a total time of 100 mins on lawncare. Rich now spends 120 mins weeding his own house, and 90 mins on Mike’s house. This gives him a total work time of 210 mins now. Both Mike and Rich would save time from this. This makes the trade efficient.

Trade is efficient, get more from stock of resources.

Trade made both Mike and Rizzo better off. Rich still spends more time on lawns though. Poorer person always gains more than richer person. Mikes share of wealth increased more in other direction. Constant marginal returns

Production Possibilities Frontier

This is shows decreasing marginal returns depicted by this graph

http://www.google.com/imgres?q=production+possibilities+frontier+bread+and+books&um=1&hl=en&client=safari&rls=en&biw=1270&bih=628&tbm=isch&tbnid=jfOUMdZ5aaenHM:&imgrefurl=http://cdis.missouri.edu/exec/data/courses/2305/public/lesson01/lesson01.aspx&docid=k7IyNa6hDMEC5M&imgurl=http://cdis.missouri.edu/exec/data/courses/2305/public/lesson01/Lesson-1-Experiment.jpg&w=428&h=334&ei=QpykToabKYng0QGY-JCIBQ&zoom=1&iact=hc&vpx=314&vpy=147&dur=2795&hovh=198&hovw=254&tx=85&ty=97&sig=116585071145512099430&page=1&tbnh=133&tbnw=169&start=0&ndsp=18&ved=1t:429,r:1,s:0

If Rizzo only produces books, he can produce 2,000. If Rizzo only makes bread, he can make 4,000. The amount of books and bread Rizzo can produce is based on materials, resources, cost, ect.

Properties of PPF

1.   Can produce any amount of each product that is inside of the curve.

2.    If Rizzos wife can produce 5,000 pieces of bread and only 1,000 books then she has an absolute advantage in making bread. The absolute advantage is the person who produces more. Rizzo has an absolute advantage in producing books.

3.   All points to northeast are unachievable as of now.

4.   Points on PPF are productively efficient (most outputs from inputs) For outcome to be economical and efficient, what is produced has to be what people want. (getting what people want at lowest cost)

5.   Slope. (captures tradeoffs. Ex. Less bread to produce more books.) Slope tells you how much bread you have to give up to get 1 more book. Give up more bread as you make more books.

6.   Change in slope has meaning. “Law of diminishing returns” (law of increasing opportunity costs) Not only do you make trade offs to get more of something, but tradeoffs get worse as you get more.

If the X and Y axis were teachers and doctors, you get lower quality inputs when you expand. Quality of doctors gets worse as you take more teachers to become doctors. When we pull away good teachers, we take away from teaching quality as well.

7.   Economic growth. Comes from when you get to the outside of the line. Growth can come from

1.   More resources creadted, found, more stuff,ect

2.   Technology (changes to let us use resources better) In 1970, we used 16,000 BTU’s  of energy to produce each dollar in GDP. It costs 7,000 BTU’s today. This shows that we use 50% less energy today than we used back then. This allows us to consume more resources with the same energy output.

3.   Trade (If we find a resource that only helps medical care, the X axis will go further out.  If we find a new energy source, it helps all of the inputs, not just 1.

COMPETITIVE ADVANTAGE

Rochester graduates Cornell Graduates

Wine Cameras Wine Cameras

10 bottles 5 cameras a year 5 bottles 4 cameras a year

a year a year

Rochester is better at making cameras and wine. A PPF for a situation like this would look like.

 

The difference between this graph and the concave one is that as the Y axis decreases, the X axis increases at the same rate and vice versa. In the concave graph, It depicts decreasing marginal returns based on how much you move in one direction, the slope increases and decreases at different rates. Total production changes at different rates based on where you are on the line. On the linear line, the total production stays the same.