Economics+T3

Tommi Jermain Lexi Jorge AlexisC Trevor  Kristen Tanner  Valentina Dominique Alex  Khalil  Austin  Ben Eric Natalie Andrew Tori

Freakonomics 5 Paragraph Essay doc 5 paragraph page link

=**Skittles**=


 * <  ||= **1** ||= **2** ||= **3** ||= **4** ||= **5** ||= **6** ||
 * < **Green** ||=  ||= 5 & 2 ||= 5 ||= 1.5 ||= 5 ||= 4 ||
 * <  ||=   ||= 2.75 ||=   ||=   ||= 2.5 ||=   ||
 * < **Yello** ||=  ||= 5 & 2 ||= 4 ||=   ||= 4.5 ||= 4.5 ||
 * <  ||=   ||= 2.75 ||=   ||=   ||=   ||=   ||
 * < **Red** ||= 20 ||=  ||=   ||=   ||=   ||= 21 ||
 * <  ||= 30 ||=   ||=   ||=   ||=   ||=   ||
 * < **Orange** ||=  ||= 7 & 2 ||=   ||=   ||= 10 for 2 ||= 11 ||
 * <  ||=   ||= 11 ||=   ||=   ||=   ||= 5 ||
 * < **Barney** ||=  ||= 10 ||=   ||=   ||= 21 ||= 16 ||
 * <  ||=   ||= 2 ||=   ||=   ||=   ||=   ||
 * < **Half & Half** ||=  ||=   ||= 33 for 2.5 ||= 40 ||= 21 ||=   ||
 * <  ||= $59.60 ||= $60.78 ||= $42.62 ||= $53.01 ||= $47.15 ||= $69.82 ||
 * <  ||= $59.60 ||= $60.78 ||= $42.62 ||= $53.01 ||= $47.15 ||= $69.82 ||
 * <  ||= $59.60 ||= $60.78 ||= $42.62 ||= $53.01 ||= $47.15 ||= $69.82 ||


 * __Supply and demand__ **

-We paid $30 for the red skittles because we wanted it badly

-6 Paid $21 because they were “rich”

-Red was expensive was expensive because they were rare and they are the best quality one group bought all there was

the mixed bag was rare


 * Supply**- is a Products or Services,


 * Demand ** is a Want or Need

// __Introductory__ //// __prices__ //

// Why are these prices higher? More demand and limited supply. //

// Why does it cost more for an initial production run? All the fixed costs are the same but the production is "shorter" till the product sells millions. //

// These costs are call //** start up costs. **


 * __Economies of Scale__ **

// Think of the school and lawn company. The costs only change a little when you have a class of 5 vs a class of 15. When you make the most of your start up costs and you are running at or close to //** Full Capacity **//, life is good. What if you get too many students or too many lawns to cut? //** Over Capacity **


 * __Promotions or BOGOF__ **

Don't assume that companies make so much profit that when they do this they automatically still make money. That may be true but not always.

// The reasons companies still make money is because of economies of scale. //

Are they paying any more for all the sales volume ?

Do they get a better price from their suppliers because of the volume?

Are they getting rid of old stock?

Are they trying to have you try a product?

Do they hope you will buy something else while you are there?

Will you spend more because you think you are saving?


 * What is the difference between dominant company and a monopoly? **

Monopoly means that you have no choice and isn't seen as positive from a supply and demand point of view.

Dominance is usually because of excellence.

Ethical- Unethical

Unethical: (illegal) Often when you need to trust someone but don't know, see or understand what they do
 * Fake goods (if sold as real)
 * Dentist (when they say you need a filling or…)
 * Exterminator (says you have a rat problem…)
 * Computer-
 * Mechanic-
 * Payment issues- paying late, short paying, paying over a period of time

Unethical: (legal) These activities are legal but .....
 * iPhone cost vs. profit
 * data plan
 * companies sign you up, and YOU have to cancel
 * Cosmetics
 * Weight loss

__ **Outsourcing** __

- Someone else, in a different place (state) can make what I make here much cheaper

- Tax is lower

- Labor is cheaper *Food, water, housing, land, gas, electricity, etc.

- Laws are different

__ **Problems of Foreign Production** __


 * Takes away jobs of Americans (profit, cheap)
 * Child labor
 * Danger
 * Conditions
 * Wages
 * Hours
 * Laws are different

Remember as we produce more things cost less, so as things become cheaper people often buy more (so they make more)


 * Production in general**

The reason companies produce more is to sell more and to make more money. How do they achieve this based on economies of scale? (Two correct answers to this question)


 * Production and pollution/waste**

We discussed that as we produce more there is more pollution. This waste/pollution occurs at various points. At the factory, what they physically throw out. They use extra power. This extra power often caused coal or oil fired power stations to burn more. They ship more goods by boat, train or truck. All diesel smoke pollution increases. Lastly we have more cheap goods in our homes and are more likely to throw more away as we buy more.

__ **Money** __ How did money come to be? Why was it necessary?

Why was gold used as common currency? Because of its intrinsic value. What was the Gold standard? Where did paper money come from?

__ **Banking** __ If you go to a bank for a loan what are the kind of things they are likely to want to know or ask?
 * What job do you have?
 * Who do you work for?
 * How much do you earn?
 * What is your income flow like?
 * What your marital status is?
 * What other debt do you have?
 * What are your expenses?
 * What do you want the loan for?
 * How old are you?
 * Have you borrowed money before? (Credit score)
 * Basically it wants to minimize its' **RISK**

You must know why these questions are asked?


 * __How do Banks make money?__ **
 * Interest charged (from borrowing)
 * Monthly maintenance fees
 * Transaction fees
 * Annual card fees
 * Penalty charges
 * Interest earned (investments)
 * Cash withdrawal (ATM)
 * Wire transfers Money gram
 * Saftey deposit box
 * writing checks
 * FOREX

** Economic Models **

 * ||  || Communism ||   || Socialism ||   || Capitalism ||   || Free Market ||
 * Control ||  || Total Control ||   || Community Control ||   || No control ||   || No government involvement ||
 * Job Choice ||  || Assigned ||   || Based on talent for overall community ||   || Individualized and Owner choice ||   || Supply and demand ||
 * Taxation ||  || None ||   || Based on profit & growth ||   || No tax (but for services) ||   ||   ||
 * Worker Protection ||  || High ||   || High- Community accountability ||   || Based on performance (potential abuse) ||   ||   ||
 * Health ||  || Everybody Gets ||   || Good & for all. If one suffers community suffers ||   || Depends ||   ||   ||
 * Education ||  || For all good ||   || Good & for all. ||   || Depends ||   ||   ||
 * Job Incentives ||  || Low/Non-existent ||   || High because its for the community- No job interest? ||   || More pay/promotion ||   ||   ||
 * Unemployment ||  || Equal ||   || Equal for the whole community ||   || Depend but often self ||   ||   ||
 * Pensions/Aged ||  || None ||   || None ||   || none ||   ||   ||
 * Ownership ||  || Government owns all ||   || Communal ||   || Private ||   ||   ||
 * Ownership ||  || Government owns all ||   || Communal ||   || Private ||   ||   ||