Myths about the rich

The 2007 edition of the Forbes 400 wealthiest Americans was released last week. As in years past, it's one of the more useful economic annuals when it comes to laying bare the folly of antitrust, worries over the wealth gap, and perhaps silliest of all, the assumption that the rich became that way for exploiting the non-rich

A lesson in supply and demand

The ethanol boom of recent years — which spurred a frenzy of distillery construction, record corn prices, rising food prices and hopes of a new future for rural America — may be fading.

Only last year, farmers here spoke of a biofuel gold rush, and they rejoiced as prices for ethanol and the corn used to produce it set records.

But companies and farm cooperatives have built so many distilleries so quickly that the ethanol market is suddenly plagued by a glut, in part because the means to distribute it have not kept pace. The average national ethanol price on the spot market has plunged 30 percent since May, with the decline escalating sharply in the last few weeks.

Shift your demand curve to the right and watch equilibrium price and quantity rise. Then, push your supply curve to the right far enough so that price falls (by 30%).

Outsourcing; Is it really a problem?

When the politicians begin complaining about outsourcing in the American economy, have them read this article.

Every Breath You Take

Columbia Business School's Dean Glenn Hubbard sings about wanting Alan Greenspan's job that went instead to New Fed Chair Ben Bernanke. Parody created by Columbia Business School students.

Is a new tax the answer to Global warming?

Check out Greg Mankiw's article about the use of a carbon tax to limit pollution and the spread of global warming. Does this idea make sense to you?

U.S. Farmers Rediscover The Allure of Tobacco

In economics its called the law of unintended consequences. The government tries to pass a law that is beneficial and the law has the totally opposite effect. The U.S. Government ended subsidies to U.S. tobacco farmers hoping that they would start growing some other crop. Now they are growing more tobacco than ever. What do you think other nations are saying about U.S. tobacco growers exporting the evil weed to their countries?

Determinants of Supply and the Market for Pork in China

Thanks to Jason Welker for this timely article and idea. Since we just studied Supply Determinants, remember:
S - Subsidies and Taxes
T - Technology
O - Other goods
N - Number of sellers
E - Expectations
R - Resources, raw materials
Using your knowledge of the determinants of supply, analyze what is happening to the market for pork in China. Several of these determinants are at work here. Which way is the supply curve for pork shifting, and why? Also since the price of pork is going up, what effect will it have on the demand for other items? Remember substitutes and complements.

Is the U.S. ready for Universal Healthcare?

Read this article from the NY Times, then do your own research and decide, "Is the average American voter ready for a government run system of Universal Health Coverage?"

Cash for Grades

New York City is considering giving its students money for good grades. What do you think?

U.S. Food Aid for Africa: Helping or Hurting

Read this article about how U.S. aid for Africa may actually be hurting local African farmers . . .

First the Oil companies and now Baby names, What will Venezuela and President Chavez regulate next

The prolifically inventive world of Venezuelan baby names may be coming to an end. A bill introduced last week in Venezuela would limit parents of newborns to a list of 100 names established by the government.

Week 2 assignment

Go to Reffonomics website. Read through powerpoints over Unit 2 (Production Possibilities Curve/Frontier). Take multiple choice quiz. Print out score and bring to class on Friday Sep 7.

American Productivity

In honor of Labor Day, let's hear it for the American worker. Fox News reports:

"The average U.S. worker produces $63,885 of wealth per year, more than their counterparts in all other countries, the International Labor Organization said in its report. Ireland comes in second at $55,986, followed by Luxembourg at $55,641, Belgium at $55,235 and France at $54,609."

Something to ponder, What is it about our society and culture that makes us want to work so hard?

Will trips to the mall become a thing of the past?

Check out this story as online clothing sales have surpassed the online sales of computers and software for the first time in history. What are the implications for so called "brick and mortar" stores like Dillards, J.C. Penneys, etc. . .