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. . .

Best High School Commencement speech ever

Check out Conan O'brien's speech to the graduating seniors from Stuyvesant High School in New York.

Predictions

Check out these predicting tools from Ian Ayres, a professor at Yale Law School who also has a Phd in Economics. As Economists one of the things we do is try to anticipate and predict future events.

World Clock

Check out this fascinating website. This world clock is keeping up with numerous events. Can you see the trends? Did any of these trends surprise you? Check out the numbers for the year, month, week, current day, or just how fast they go up from the moment you start the clock.

iQueue

iQueue
by Ryan Knapp


The Apple iPhone is this summer's must-have gadget, and lines began forming across the country four days early for the chance to grab one of the first available. iPhones sell for about $500, and if you hope to get one early, you may have to queue up for days just for the privilege.

Paradoxically, the type of people who are willing and able to spend $500 on the iPhone are also likely to have high-paying jobs that make it difficult to take an entire week off to wait in line. Fortunately for gainfully employed iPhone seekers, summer has brought with it a surplus of young people looking to earn a bit of extra money.

Ads are popping up all over Craigslist for so-called "professional waiters" who, for a fee, will line up to buy you an iPhone. The going wait rate is currently around $250 in New York and $200 in San Francisco. Lines are now full of people donning "iWait" shirts to show off their newfound occupation.

While the iPhone scene is replete with interesting economics, perhaps the most interesting phenomenon is the group of people who choose to bear the cold nights themselves rather than pay an iWaiter. With an ample supply of "low-skilled" workers fit for the job, many still choose to do the waiting themselves. Why would someone prefer to spend his or her own valuable time waiting in line when they could pay someone else who, by virtue of their offer, almost certainly has a lower opportunity cost?

Discussion Questions

1. What factors determine a person’s opportunity cost of waiting in line to buy an iPhone?

2. What benefits might people reap from waiting in line? (Maybe they enjoy the camaraderie? Perhaps they are "purchasing" a good story to tell at parties?)

3. All transactions involve an element of risk. Contracts, social norms, property rights, insurance, and consumer protection laws can help to mitigate transaction risks and facilitate trade, but waiting in line to buy an iPhone is a fairly informal transaction. What risks do line waiters assume? What risks do the people paying line waiters assume? Search for some iPhone line waiting listings on the Craigslist site for the San Francisco area. In what ways do iWaiters attempt to mitigate transactions risks?

4. If people are willing to pay upwards of $700 ($500 cash, $200 for a waiter) for an iPhone, why doesn't Apple raise the price?

Financial Times economics reporter Tim Harford addressed a similar question about the Xbox 360 shortage of 2005 here and here.
Labels: Opportunity Cost

Monkey Business

Most of my students know of my aversion to anything having to do with monkeys. This story just goes to show that they are smarter and more cunning than we think...

The Benefits of a College Degree

Opportunity Cost

Two roads diverged in a wood, and I– I took the one less traveled by, And that has made all the difference—Robert Frost

The Economist.com has a nice definition of opportunity cost:
The true cost of something is what you give up to get it. This includes not only the money spent in buying (or doing) the something, but also the economic benefits (UTILITY) that you did without because you bought (or did) that particular something and thus can no longer buy (or do) something else.

The NFL draft is a popular example where opportunity costs are important. The draft is set up where draft picks are chosen sequentially, with each team having a set time to make a decision. Teams not only consider basic things like holes in the roster and which players are remaining, but they also consider possible alternatives—like choosing another player OR considering trades from other teams. Teams make mistakes when they pick a player too early–if they could have gotten the same player in a later round–or when they do not accurately gauge the value of their high pick to another team. Teams that fail to consider opportunity cost end up with some bad choices, and fans quickly voice their disagreement to management.

Week 1 Assignment

Go to Reffonomics website. Click on Lesson Plans link. Under basic concepts lessons, click on "Introduction to Economics." Review lessons 1 and 2. "What is Economics?" and "Opportunity Cost vs. Tradeoffs." Click on Multiple Choice quiz link and take 10 question MC quiz. Print off your score. Bring to class on Friday August 31, 2007.

Welcome

Welcome to Mr. Pye's AP Economics Blog.