#macroeconomicsclass

1. The most notable sales practice based on elasticity that I can think of is the way that live sports are packaged in television products. Live sports are the only TV program to maintain some inelastic demand: one has a vested interest in seeing the actual broadcast and streaming options are limited.  Television providers can charge a premium for that content and package it with other channels that one may or may not want. This sales practices seems to be working pretty well, but will probably lose its effectiveness as technology makes more convenient substitute products easier to access.

1. One would expect Uber or Lyft entering a market to reduce the demand for taxi medallions.  Those services serve as substitutes for taxis, so the demand curve would shift to the left for taxi medallions.

2. I lived in the DC metro area during the notorious cupcake boom.  Within a year or two there were boutique cupcake shops opening up in all of the desirable neighborhoods.  In early days those shops could charge an immense amount for one of their treats as people flooded in to be part of the new fad. Shops opened at about the same rate as people getting tired of expensive cupcakes, so the supply surged while demand plummeted.  A lot of those shops either closed or changed to selling doughnuts, which I think was the next confection fad to sweep our nation’s capitol.

1. I finally learned what comparative advantage really means.  I always confused it with absolute advantage, but now I know the difference between the two.

2. International trade is a net positive.  It allows international economies to operate much more efficiently and can create opportunities that are not as widely available in countries excluded from trade.

3. No, my opinion of trade stayed about the same after reading this chapter.  That opinion is now backed by the wonders of mathematics, so it was nice to add a quantitative angle to my soft, liberal arts-educated mind.

1. These simple models (such as the PPF) take relatively complex issues and make them an simple to understand graphic.  By stripping away a lot of the details of issues of production, we can more easily focus on how trade-offs and other economic relationships function.

1.  Hey, that was exactly the same as the micro chapter.  I suppose this is a useful reminder about the art and science of being fleeced by huge textbook companies. That isn’t really a change in my perception of economics so much as a thoroughly reinforced fact. Is this a useful example of a market failure? The command decision was made to use this book in its most recent edition including specific interactive components which leaves the consumer unable to interact with the full market of economics texts, namely rental and used markets. I suppose the open market was accessed at the institutional level when this was chosen as the sole text for the course, and that the institution is the true consumer in the textbook market meaning that this isn’t a failure at all. That, however does not make me feel any less bitter about my access code still being on back-order.

I also look forward to seeing if the study questions keep taking little swipes at organized labor. Once again, not really a new perception, but maybe it will change my mind. Who knows, it’s a long summer.