Adam Almany
Question: Describe three examples of how incentives can result in unattended consequences.
An example of incentives resulting in unintended consequences is the crisis involving the Black Rhinos. The Black Rhino was once large in numbers but because of its extremely expensive horns, hunters have tracked them down and killed them for their horns. The hunters sell the horns on the black market for extreme profits. This resulted in a giant loss of numbers in the population of the Black Rhino's. Another example of incentives resulting in unintended consequences is when the government taxes the people. The people work to provide for their families and taxing them reduces their incentives to work because they do not earn what they work for. This causes problems because the worker at the end of the day is working for only about half his income the rest is paid to the government in taxes. The last example is how the government taxes an individual item more than others. This is unfair for consumers because they work hard in order to enjoy daily items but instead can not afford because of the extreme taxation on that item.
Tuesday, September 11, 2012
Thursday, September 6, 2012
Power of Markets
Prompt: Using Whelan as a guide, discuss how Economic decisions about what to produce, how to produce, and how much to produce are made.
The decisions on what to be produced, how to produce, and how much to produce are made by the market. People who go into stores to buy items are given choices. They choose whatever product is the cheapest yet produces the best overall outcome. As a producer, they need to recognize what to produce to fit the buyers needs, and they need to create a reasonable price. How to produce it is also up to the producer, they can outsource jobs to other countries and have it made cheaper or they can pay more for better quality in the USA. The decision on how much to produce has to be made by looking at the patterns. If customers are buying the product regularly then the producer needs to produce enough to insure that the buyers can continue to buy. If the producer over produces then he is loosing money and is wasting resources. The process of producing relates to supply and demand from customers and it is a challenging decision in Economics.
The decisions on what to be produced, how to produce, and how much to produce are made by the market. People who go into stores to buy items are given choices. They choose whatever product is the cheapest yet produces the best overall outcome. As a producer, they need to recognize what to produce to fit the buyers needs, and they need to create a reasonable price. How to produce it is also up to the producer, they can outsource jobs to other countries and have it made cheaper or they can pay more for better quality in the USA. The decision on how much to produce has to be made by looking at the patterns. If customers are buying the product regularly then the producer needs to produce enough to insure that the buyers can continue to buy. If the producer over produces then he is loosing money and is wasting resources. The process of producing relates to supply and demand from customers and it is a challenging decision in Economics.
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