Friday, February 29, 2008


Jake sent me this link:

And it made me curious what you guys would say - not necessarily political, but economic analysis of what he is saying.


Wednesday, February 27, 2008

Price Ceilings & Floors

Analysis & application of S & D, elasticity and price ceilings/floors tomorrow!

Oh, and btw - it seems like I am all caught up on blog grading! Amazing! I'll try to get the grades in by tomorrow so you can see, but some people are a little behind, as well. You will know if I got your post by whether or not there is a message from moi. :)

**Calling Phil: Calling Phil**
For some reason, the link to your blog is refusing to work. I've tried a lot of different things, and nothing is working. Even if I go to a new window and type in your address, it will come up with an error message. Would you check to see if something has changed with your blog address, etc? I haven't been there to grade yet. If it's magically disappeared, please don't panic - we'll work it out.

Sunday, February 24, 2008

All right...

Okay, guys - it's 9pm, which means I have to go try to relax now. I'm through about 2/3 of 4/5th hour for the grading. I know some people haven't posted their blog for this week, so that will mean some backtracking - that's okay.

You have been doing a great job on the blogs so far! There has been some really great analysis of concepts we've talked about - and some we haven't. :)

I have Pearl Jam on the computer (hey, don't knock it...Eddie Vedder is a genius...) and the dryer needs to be taken care of, so have a nice night. I'll finish these tomorrow and Tuesday (after all, it looks like we might get ANOTHER dump of who knows where we'll be on Tuesday?).


Next up - more questions from comments!

All right - next!

Sam asked:
I didn't use an article for my blog entry. I wrote about relating the information to my life. I hope that's okay..
Perfect. :)

Taylor said:
I agree with Morgan on how car dealerships use incentives to their advantage. When my mom and I went to get my car I noticed how point 6 can be used to the dealers advantage. I test drove 3 or 4 cars and the dealer definetly put a lot of effort into trying to sell me a more expensive car because it had cool things a new teenage driver would want such as a sun roof or a new stereo system. It's definetly important not to show too much emotion when looking for a car, because dealers will definetly play off of that.
This is soooo true. I'm not sure how many of you have gone to purchase your own car - but the biggest advantage you can give the dealership is to look like you will not walk away from the deal. Remember that there's always another car right on the next lot. My husband and I found it really funny - to show him how cool the car was, the sales guy popped the hood and kicked the tires, etc. For me? Ooh, look, the mirrors move and look at all the radio controls on the steering wheel...

And from Vicky:
It's all about the information you have. When buying anything, you need to be an informed consumer. Don't expect the salespeople to educate you. It's your responsibility to educate yourself.
"Let the buyer beware" - caveat emptor. Great comment, Vicky. Should I be alarmed that you have owned more cell phones than I have, and I am twice your age? ;)

And David:
Acting on a whim, or executing some action solely on emotion, though it may be fulfilling at first, often times may leave regretting your quick decision. Like (almost) anything in life where emotion isn’t enough, a little bit of research, enough to acquaint oneself with the matters, will help.
My family makes fun of me constantly because of the time I'll take to make a decision on something big. In the last 5 months, we've had to buy a clothes dryer, a car and a new bed. Each got the same analysis from me. Yeah, I'm a sick person. But's my money...why would I want to throw it away? If you can take the emotion out of the decision, get the research done, as David mentions here - it's rare for me to regret a purchase. I like that.

Wow, this turned into a good discussion on consumerism. Keep it in mind when we get further in this present unit. :)

From this, it’s obvious that the price displayed may not be the lowest price the dealers could sell, or even the actual worth of the car. (This is still David)
Excellent analysis on incentives, David! So true...especially with cars.

From Vicky:
Thanks, I was just wondering about the links!Can we do extra analysis blogs or comments for extra credit of some sort? Or would we just get brownie points for being overachievers?
You, an overachiever? Say it ain't so! lol
Let me think on this one.

From Brent ("Some Stuff For You" below):
The income effect states that when your income is fixed, as the price drops of a certain item, you can purchase more of that item with the same income. So the Demand curve is downward sloping because the quantity demand increases (x axis) as the price drops (y axis). The substitution effect describes the same thing but going in the opposite direction. When the prices increase, the quantity demanded of that good decreases, and people can purchase less. People will then find substitutes to that product and the product's price will continue to increase and people will be able to purchase less and less of the product.
EXCELLENT analysis and explanation of the income and substitution effects. If anyone isn't getting the difference, read through this again. And again. Great job!

Morgan let us know that:
I like grape jelly better than strawberry, just to let you know...
If those are my choices, me, too. Otherwise, I personally like Apple Pie jam. It's amazing.
And then Sam said:
Note to morgan: Raspberry jelly is so much better than grape and strawberry, just to let you know. =)
Raspberry jelly is good...but I stand by my choice. ;)

These threw some people off ("Supply & Equilibrium" below):
(1) Do these things affect the demand or supply of oil? (a) The Alaskan oil pipeline was completed. (S) (b) Price supports were removed from oil. (S) (c) Oil was discovered in the Bering Sea. (S) (d) Sport utility vehicles become more popular. (D) (e) The use of nuclear power declined. (D)

(3) Demand or supply of jeans? (a) A new technology becomes available that cuts the time to make jeans in half. (S) (b) The price of denim falls. (S) (c) Jeans go out of fashion. (D) (d) The price of a pair of jeans falls. (QD/S)(Look at the movement on the graph if both curves are present) (e) The wage rate paid to garment workers increases. (S) (f) People's income increases. (D)

Okay - I'm off to start on your blogs! It's 7:30 already, so don't pout if I don't get to you tonight. :)

See you tomorrow -

Some questions you guys had on posts...:

I'm trolling through blog comments and there were some questions that went neglected as I freaked out the last two weeks. :)

First, from Marty, regarding PPC's:
a) An increase in the average length of an average vacation would cause an underuse of resources (in response to Savannah's uncertainty, I think she's right about that...) To be completely honest, I'm not entirely sure what this would do to the PPC. I would assume it would cause it to shift inward, but I thought that the curve itself only shifted if something caused the amount of available resources to decrease. As far as I can ascertain, an increase in vacation time wouldn't so much decrease the amount of resources available, but just cause the underuse of them. I know this was marked as a point closer to the origin than any of the curves on the PPC graph we studied. Is that the same in this instance, too? It seems like it'd be more appropriate; the human resources are still there, they're just not being put to use...
There is a good argument for two possibilities here. The good news is that as long as you are able to justify your response, you'd be pretty safe with either. First, if the average vacation nationwide increased in length, the "correct" answer is that the curve would shift in. It's a loss of resources.'s entirely possible to view it as an underuse of resources (i.e., a point inside the curve), because it's plausible to use those resources (human resources) differently. With an explanation, either is perfectly acceptable. If it were a multiple choice, I would go with the curve shifting in.

From Erika, same post, about PPC's:
c)A decrease in the average retirement age would cause nothing if the same amount of people stayed in the work force. I'm confused about what this means, are you referring to more and more people dropping out of the production of goods? In which case the graph would be likely to curve inward? (not sure!)
The work force would mean a change in resources - with that, it's going to affect the curve. So yes, more people dropping out of the production, and yes, the curve shifts in. :)

From Josh, same post - and I'm so sorry I didn't see this before your test.
I am commenting on number 4 as well. Before i answer the question i had a question about the ppc. in our packet, most of the graphs show "consumer goods" as x axis and "capitol goods" as y axis. is this just an easy example to use or is this like the base model to think about when answering these questions?
It's just an example. Anything on the national exam will tell you what would be on each axis. The chances of it being a FRQ are pretty slim, but there will be m/c questions on PPC's. Hopefully that will help with retests, and I don't have to feel too guilty about missing it. :(

Tanvirkamal, same post -
EXCELLENT analysis on the MySpace and scarcity. Really a great way to view it.
Oh and this is going to a VERY fun semester, I will make sure of it, many of you know I can do that...
How fun...? lol

John mentioned (same post):
# 1) The author believes that the opportunity cost is that of short term loss of jobs within the United States. The author believes that the loss is being exaggerated and really should not be of conern to Americans but he also states that it should not go unnoticed. The author believes that the government should not adapt a policy of protectionism but rather let the economy be and have things take care of themselves through a competitive process between companies within the economy.
Get used to this way of thinking. :) We'll come back to it again...and again...and again. Great interpretation of the author.

Brent, same post, on outsourcing:
He says that the comparative advantage of trade by outsourcing will benefit the US economy in the future compared to the loss of the jobs in the short term. Personally, I think this author can write this so biasedly because he or no one else he knows has been affected by outsourcing.
One of the first rules is to take the emotion out of the analysis - which is really hard, especially if you've been affected by outsourcing. It's easy to say "Jobs in the US will be regained in other sectors", but the reality is, if you (or a friend/family member) is the one losing their job, it's different. Basic economic free market theory (which is what we have to look at in this class) will state that when trade is willing, it's good for all involved. Therefore, jobs that go overseas can be seen as opening our economy up to increase in other sectors - usually seen as higher level jobs in technology or services. It doesn't, though, look at how those people are supposed to make that shift from the GM factory in Janesville to some high-tech job. It's a tough one.
He doesn't see the individual when writing this article at all, how they can't pay their bills because they don't have a job, how they can't support their kids, how they get deeper into debt when they never should have been let go to begin with. So many corporations make so many horrible decisions, it just pisses me off!
You're right - it's not about the individual for the author. The corporate edicts have changed in the last 50 years or so. Just as the American worker is no longer concerned with company loyalty, the company is no longer concerned with keeping their workers happy. It's really changed how business is done in our country. Is there an answer? Well...I'm not sure. The bottom line for businesses is that their costs are lower and profits rise. Yes, there are businesses that will take other things into account, but that number is lower than it has been in the past.

Okay - that's the comments from the PPC post (the one entitled "Friday" below). I'll hit more later. :)

Thursday, February 21, 2008

Quizzes -

Here are the things people are most getting mixed up on during the quizzes (wow, what a great sentence):

1. The Laws of Supply & Demand - you MUST put price first. It's a word explanation of the slope of the supply or demand curve. You cannot put a change in demand/supply first, because then it's not true. So - Law of Demand states that as price rises, QD decreases (as price goes up, people buy less) - and vice versa. Law of Supply states that as price rises, QS increases (as price goes up, suppliers want to supply more). It is incorrect to state that as supply increases, price increases = that's not the law of supply, and it's not true. When supply increases, it causes the equilibrium price to decrease (when the curve shifts along the demand curve). However you need to learn so. Stare at this. Go back and look at the animated file in previous postings. Staple a sheet of paper to your head. Tattoo it on your neck. Whatever. You must know this. I promise - if you state something other than "people buy more when price is low" on the national exam, it will be wrong. Same with confusing QD and D/QS and S.

2. Determinants of S or D. Know these.

That's really what's hurting most people. I'm getting a good grasp of who's understanding, who's mostly understanding, and who's lost. There are 2 in 4/5 and 4 in 7/8 that are lost. You have choices - make the correct economic decision for you: study more, see me so we can get you on track, or drop to regular. Seriously...this is easy stuff compared to what we're going to be getting in to. I will do all I can for students who are willing to work at it...if you sit there and don't study, I have no time to do it for you.

What a terrible way to end a post. The good thing is that there's no extra homework this weekend - look at it, see what you can do, if you're confused, stop and we'll be going over elasticity on Monday. Blogs: you should have a post on yours with analysis (shouldn't be tough to find a S & D article that is analysis-worthy), plus two comments - here or on someone else's blog. I will be grading this weekend. Promise.



Hey there -

Some stuff to start elasticity - we'll be going over it in class on Monday, but if you're able to look stuff over this weekend, it could give you a headstart. Elasticity video - it's 38 minutes long, just a warning. :)

Elasticity animated gif file:

Monday, February 18, 2008

Work Day

Well, Tuesday will be time for you to practice with S & D. You know where the answer book is if you want to see if you're heading in the right direction.

Remember - the important part is to look at what the first change would be. Don't overthink.

A link:

Also, look over your test by Wed - if you have any questions, we'll go over it then.

See ya -

Friday, February 15, 2008

Jobs...just because 4/5th hour asked... :)

Okay - the list of jobs, just because 4/5 really wanted to know. :)

1. Ben Franklin Crafts (Oconomowoc)
2. Factory – M-16 rifle magazines
3. Picture Framing Store
4. Housekeeping – Retirement Home
5. Waitress – Country Kitchen
6. Waitress – Bowling Alley
7. Bartender – Bowling Alley
8. Housekeeping – 40 Winks Inn
9. Minnesota Fabrics (2 years – a new record)
10. Custom Clothier (the 1st time)
11. Deli Counter – Pick n’ Save
12. Substitute Teacher – Arrowhead
13. Substitute Teacher – Kettle Moraine
14. Substitute Teacher – Watertown
15. Waitress – Chuck’s Supper Club
16. Teacher! South Texas ISD/Science Academy (4 years! A
newer new record!)
17. Bartender – Juan O’Leary’s
18. Sales – Watkins products
19. Temp agency (about a month)
20. Paper plate factory (5 days)
21. Kmart – cashier, dept manager (the only job from which
I’ve ever been fired)
22. Waitress – Chancery
23. Teacher - Rogers Memorial Hospital (psych hospital) – long term
care adolescents
24. Teacher – Kettle Moraine (one semester)
25. Teacher – Fort Atkinson! (so far, the newest new record –
6 years and counting!)
26. Freelance Economic Education Consultant (& writing)
27. Custom Clothier (the second time)
28. Social Studies & Economics Consultant for the Wisconsin Department of Public Instruction

Supply & Equilibrium

Just one animated gif file on this one:

Some questions to think about:

(1) Do these things affect the demand or supply of oil? (a) The Alaskan oil pipeline was completed. (b) Price supports were removed from oil. (c) Oil was discovered in the Bering Sea. (d) Sport utility vehicles become more popular. (e) The use of nuclear power declined.

(2) Why is it more expensive to ski in Aspen in January than in April?

(3) Demand or supply of jeans? (a) A new technology becomes available that cuts the time to make jeans in half. (b) The price of denim falls. (c) Jeans go out of fashion. (d) The price of a pair of jeans falls. (e) The wage rate paid to garment workers increases. (f) People's income increases.

Thursday, February 14, 2008

Some stuff for you -

Okay! Here are some animated gif files for you, if you are so inclined:

Law of Demand:

Slope of the Demand Curve:

Determinants of Demand:

Questions to ponder:

1. Give two examples of how you have observed the Law of Demand in real life.

2. Explain why a reduction in the price of a normal good does not change the demand for that good.

3. What is the difference between the income effect and the substitution effect?

4. Substitutes, complements, or unrelated? (a) peanut butter and jelly, (b) private and public transportation, (c) Coke and Pepsi, (d) alarm clocks and automobiles, (e) golf clubs and golf balls.

I'll get some on supply up this afternoon or tomorrow morning. :)

Tuesday, February 12, 2008


Hey guys -

I'm really sorry I haven't set up links to your peers' blogs yet. It's just been crazy. No excuse, just the reason.

It is third on my "to do" list for this week - so by the weekend, I will have it set up, or ...well, I don't know "or"...but it will be done. It may take me a few days to get it all set, but there will be links by Fri.

Some people have been wondering about the blogs, and amazingly, it is all laid out in the giant syllabus you got the first day of class. BUT - you need two comments per week + one analysis in YOUR blog every other week (dates are in the syllabus).

It's an expectation, but you are your own person who can make their own economic decisions. No, you can't post 100 comments this week and be done - I check weekly (or I will...) and they're either there or not. The object for this is because we just don't have enough time for huge discussions of analysis. It truly does help with analysis of information. You're the ones that freak out over grades. Do...or do not. Heh...I'm Yoda now...

After this crazy week is over, this will be updated more frequently. I'll get some stuff on Demand on here tomorrow, too. And in Edline.

Friday, February 08, 2008

Example for your blog this weekend -

I'm sorry - with everything going on I haven't taken the time to get links to everyone's blog on here. If I have time this weekend, I'll do it then. You can get to other people's blogs by clicking on their name as they leave notes here - it will take you to their "dashboard", and then you can find their blog from there. Your weekly notes can be on anyone's blog, as long as you use the current posts

Here's an example on how to do your blog analysis for Monday:

This is the article I'm using, mostly because it's about buying new cars, which my husband and I just had to do. If you go about halfway down the page, number 3 says "compare incentives". Now if you remember one of the first things we looked at was a statement that said "incentives work." And they do - take a look at this from the article:

"If you're considering two similar (but different brand) vehicles, incentives on one of them could be all the incentive you need to make the choice between them. " Absolutely true. If all other things are equal, a person will choose the car with the incentive that fits their lifestyle best.

"You can also use incentives on one brand as a negotiating point for the purchase of another." Another great point - you can play sellers off each other.

Incentives are a basic point of economics, and can really affect what you do in any situation. After all, which would you choose...something plain, or something with a cool incentive, if there were no other difference between them? That's called "all things being equal" (ceteris paribus) - if there is no difference other than the one thing, you can analyze the situation.

Quizzes from Tuesday -

The yellow question seems to have caused the most confusion. I think people just were not reading it completely:

"Suppose that, on the basis of a nation's PPC, an economy must sacrifice 10,000 pizzas domestically to get the 1 additional robot it desires, but can get the robot from another country for 9,000 pizzas. Relate this information to the following statement: 'Through international specialization and trade, a nation can reduce it's opportunity cost of obtaining goods and thus move outside its PPC.'"

Check a couple of things here:
~Nowhere is it asking you to figure out the trade matrix - it is not necessary to answer the question
~Nowhere does it say that the robot helps make pizzas - they are unrelated
~What is it asking?

Don't get caught up in superfluous information. There's a lot of it in this question.

What is it asking? What is the answer?

Thursday, February 07, 2008

Good grief...

Well, I haven't posted new info in the hopes that we'd be into Unit Two by now...

Your test tomorrow will be the normal 50 multiple choice questions. At least you got two more days to study for it. :)

We'll start supply & demand on Monday. I'm going to have to take a few things out of the unit so we can stay on track - some application of costs that we'll come back to in Unit Three. If we feel like ever finishing the units, though, we'll have to muddle on.

Any questions on the test? I'll check in a few times today.

Friday, February 01, 2008


Well, I can't email from Edline yet, so I can't get the notes out to you from today. Your class lists aren't in Edline for the semester, so I can't even use that. This stinks! I'll try on Monday, if they get the switch over done for the semester courses. It is outlined in the packet.

A few questions to be answered for all students:
"How will we know where everyone's blog is?" - as soon as people post here what their blog name is so I get an address to their blog, I will set up links on here. If I'm really feeling adventurous, I'll even put them in alpha order by class hour. We'll see.
"When do we have to post?" Think of it as a weekend assignment every week. This week, you need two comments by Monday morning. That's why all the questions are on here - to get you thinking about it. Or, you can post questions, thoughts, concerns. Recipes for really good desserts. You know what I mean.

Here are some things to think about with Unit One and PPC's:

1. Take a look at this article: . From this author's perspective, what is the opportunity cost of outsourcing jobs offshore? Based on those costs, what does he suggest the role of the government should be in this growing phenomenon?

2. Does the Internet raise or lower the cost of making friends? As you consider this question, visit a virtual meeting place: the American Intercultural Student Exchange ( Or you may wish to participate in a live chat with other people on the Internet. Explain how scarcity relates to the Internet.

3. Visit the White House home page- Look under Current News. Choose a topic you think pertains to economics. Does the subject matter pertain to macroeconomics or microeconomics? Is the analysis primarily normative or positive?

4. Determine whether each of the following would cause the economy's PPC to shift inward, outward, or not at all: (a) An increase in average length of average vacation, (b) An increase in immigration, (c) A decrease in the average retirement age, (d) The migration of skilled workers to other countries.

5. Provide some examples of specialized markets or retail outlets. What makes the Web so conducive to specialization?