Erik Dahlman, Chapter 4, Question 6

Government should step in in various situations like the dmv so that it is fair and available. Also in terms of the postal service because it creates a monopoly allowing equal distribution and availability of mail.

Griffin Snow ~ Chapter 4 ~ Q6

I think it has been most interesting to read about government involvement with the public, especially relating to the specific regulations. Not that the government is being involved, because we already learned about he fact that they were (Circular Flow, etc.), but this chapter is more about the "how." Especially interesting was the section which told about intrusive government principles by Milton Friedman. He argued that the American Bar Association should allow more lawyers to practice law, because it would reduce the total cost. Not every case needed a top-notch lawyer, so by admitting more lawyers who could deal with more simple cases, it would allow a more efficient process for everyone involved. He compared it to having the government require all cars made to be only Cadillacs. "Sometimes" Wheelan says, "there is nothing wrong with allowing people to drive Toyota Corollas."

Hayoung Lim, Chapter 4, Question 6

I was surprised to see that with more government regulations an international quality standard is lower. I had always made assumptions that more rules would encourage better efficiency as well as less corrupt government intentions. It does make sense though looking further into it because one of the rules of economics is that everyone works for their own self interest. Therefore if a government employs excessive regulations it would lend to corruption as the bureaucrats who enforce it would want to seek out the best for themselves through the regulations and undermine the public goods such as reducing pollution. It is interesting the fine balance that has to be kept to keep the government encouraging public goods to be made but yet not have to much control in the market when it is not necessary.

Zach Newton, Chapter 4, Question 6

The section in this chapter that I found interesting was the part about the "helping hand" versus "grabbing hand" of the government. This question exists because sometimes, rather than the government reaching out to help people, it reaches out to take money and put it in the pockets of corrupt Bureaucrats. To me, the craziest fact mentioned on this subject was that "in poor countries like Vietnam, Mozambique, Egypt, and Bolivia an entrepreneur has to give up an amount equal to one to two times his annual salary (not counting bribes and the opportunity cost of his time) just to get a new business licensed." One of the negative aspects of this heavy regulation on entrepreneurship in poor countries is that businesses will go underground with no regulation in order to avoid these high start-up costs.

Elizabeth Chun, Ch. 4 Question 6

The passage I found to be most interesting was the one about India and the factories.  In order to cut down on pollution, the government wanted to close 90,000 factories, which results in about one million people no longer having a job.  This environment vs. jobs situation 15 years ago seems to be prevalent now with the bill Obama vetoed this week that would have approved an oil pipeline bringing large amounts of oil from Canada to Texas daily. Just like in India, while this would create many jobs, it would also harm the environment. Also dealing with environmental trade offs was the DDT and malaria problem. I thought the author's comparison of deaths from malaria to the daily airplane crashes was an effective and shocking way of pointing out that sometimes the answer of what to do about these issues may be obvious and sometimes they might not be.

Kate Brown Ch 4 Q6

The topic I found most interesting was when Wheelan concludes that there are situations in which the government should get involved in order to regulate what a private sector would not be able to control. However, he discusses that it is not which situations the government monopolizes that is important, it is how they regulate each situation that will have the most effect on people. Obviously there are certain areas the government should stay away from but the more important aspect to focus on is how the government intends to regulate things. For example, Wheelan gives the example of the regulations on striped bass. He admits that this is one situation that the government rightfully stepped in on however the way they handles it was more destructive than beneficial. They enacted an aggregate quota  on the quantity of striped bass that could be caught. Although having a regulation on the quantity of fish caught was helpful in order to protect the existence of the species the cap on when the fish had to be caught proved that it is how the government regulates that is the most important.

Chapter 4, Derik Graham, Question 6

The part of this chapter that i found most interesting was the section on DDT and Malaria. It was shocking to find out that many health and environmental organizations have accepted DDT as useful. Wheelan explains that economically this makes sense because DDT is an inexpensive way to control Malaria and that the next most effective way is four times higher. Despite DDT's drastic negative effects it works fantastically to control Malaria, and Malaria has a high death rate. Wheelan explains that it is comparative to a 747 crashing everday. This is an extreme cost benefit analysis that chooses the lesser of two evils.

Catherine Dustrude • Chapter 4 • Question 5&6

The Post Office example struck me through this chapter; my talkative neighbor and former boss was telling about this one time he had been waiting forever for something in the mail, but he said something along the lines of, 'well, at least the government runs this area', to which I replied, 'why?'. He then told me about each letter costing the same, and that if the Post were run by private sects, a letter to CA, would be nearer $4 than the letter to WI. I hadn't really thought about it, but it makes perfect sense. If there were private run Postal Services, many many jobs would become available, maybe new airlines, or at least the cash flow... And people would even have someone specific to call and he'll at when their mail gets lost, but the costs would go up for everyone. No one would send letters anymore, email would become popular, or everyone would get a fax machine in their homes- a substitution. People wouldn't want to take the time to go to an office and see how much exactly it will be and then buy a stamp or a sticker and then send it, people like the efficiency of just buying 50 stamps, and dropping 50 letters into a box near their home. I take the side with my neighbor, Postal Service should stay government-run. 

Chapter 3. Private party's were brought up in page 64. The talk about private parties caught my attention especially when the Coase Therum had a big effect on an Ohio Power Plant. No matter what, whoever makes use of the resource will win out in the right to do whatever it is they need to do. I found it real interesting that the Ohio Power Plant decided to give up 20 million to insure citizens to leave their estates and get on with their life. The Town of 200 was next to none now due to Private Party advantage. The question I ask is would this ever be the case in large populated areas and do Companies have the incentives to do so?

Elyse Melling, Ch. 4, question 6

I found the part about the public vs. private sector to be very interesting. The example that Wheelan gave for the public sector was going to the DMV. Anyone who needs a driver's license, permit etc. will eventually have to go to the DMV, no matter if the service is good or bad. People often complain of long wait times while at the DMV, yet they still have to go there in order to get their license or permit. When looking at the private sector, Wheelan brought up the example of a Chinese take-out restaurant. If the service is bad, you can decide to stop going to that particular restaurant. In the public sector, you don't have this luxury to decide whether you will go or not. I think that the way Wheelan explained government involvement in businesses, like the example above, was very interesting and insightful.  

Maggie Chamberlain, Chapter 4, Question 6

I thought that the point made by Wheelan about post offices was really interesting and relatable. Post offices don't need to be owned by the government when it has been proven that private businesses such as FedEx and UPS work just fine, if not more efficiently than the government-owned postal service. My mom was trying to send a package to my sister in college a few weeks ago and was told that it would get to her in 4-5 days (not in time for my sister's birthday) if she used the U.S postal service, but in only 2 days if she used UPS. She went with UPS. The government is supposed to provide goods that are non-rival, however sending packages works fine as a rival thing as it gives the companies like FedEx and UPS a greater incentive to make their customers happy and get packages to the designated recipient faster. Especially as electronic submission of messages, whether through text, email, or social media, becomes more and more prevalent, sending physical mail is becoming more and more obsolete. 'Snail Mail' is no longer a necessity for communication, so it shouldn't have to be owned by the government. Let private companies compete for the customers who still need or prefer sending physical mail.

Gracia Gilreath, Chapter 4, Question 6

I thought the section on how the Soviet Union allocated its resources was interesting and surprising. In general, government involvement in certain areas of the economy can cause scarce resources to be allocated by politicians, aristocrats and bureaucrats instead of the market. In the case of the Soviet Union, the government controlled where the money, that was taken from the workers, was going. They used the money to advance their space program, instead of creating a birth control pill, which they didn't believe was necessary in their economy. They were the first to send a rocket into space, however, they found that their decision had tragically negative consequences because in the years of communism, there was a ratio of 2:1 abortions per birth. In this situation, the allocations had benefits, but the benefits didn't seem to necessarily outweigh the costs. Government involvement was just as damaging as it was beneficial.

Marisa White Chapter 4 Question 6

 A passage that I found interesting was the one that was about India. India has one of the most heavily polluted cities in the world, Delhi The Supreme Court of India made a decision about the industrial pollution which caused tons of riots. This decision put many people (about a million) out of a job or at risk for losing it. This shows how the government can complicate things when it get involved and also shows the complexity of choosing what is more important, the employment of millions of people or trying to preserve the environment. Which then the answer to this question will change depending on the person you ask. I think if this were to work with less riots and more cooperation the change would have to occur slowly over time. Giving time to people who were laid off at first to try to come up with some other ways to pollute less in these industrial businesses or just something else that can create other jobs, but I don't know how you would choose who gets fired first, which could cause some other conflicts on it's own.

Jacob Besser, Chapter 3, Question 6

The part I found most interesting about this chapter was honestly the part about him buying his SUV. The idea that simply changing what car you drive has such an effect on the people around you is new to me. While I see that the effect is still small, the trickle down effect of his decision had an impact on a very large number of people. I could also see how say if I were to invest in a company that makes racket balls, I am inadvertently also investing in racket ball related injuries and endorsing companies that make racket ball related paraphernalia.

Ram Ch3 Q6

What I wanted to analyze was the Monopoly on Viagra and how the government has a firm grasp on the free market. One of the best ideas for monopoly is Viagra. It is so cheap to make with the ingredients only costing a couple of cents a pill, but Pfizer pumps up the prize per pill and stretches the market in there favor. Now the government protects this patent and has for 20 years, so Pfizer has no large competition before or after. Some other companies have a GIANT bone to pick with the government for this because it sucks so much money from society (males). Those companies say that it is not fair for Pfizer the keep the market under his control by his will. But Wheelan says that in a nut that if people made huge investments on new products from companies then those companies are subject to stiff competition and would not put work into creating a new product. Thus no one would innv

Ram CH4 Q6

I have learned some more about the government. In general to this chapter it way more negative. For example the paragraph with the government regulations and how he spun in negatively. For example "In the real world, government officials stand by the road to earn higher profits." What I took from that was that even though the government is the overseer. When entrepreneur's get an upper hand and it is relative to the government then they will make it harder for the smaller companies to strive. This was really significant passage to me, as I took from it that you can either make it or you can just fail because of taxes and those things. There is a large threshold.

Zach Newton, Chapter 3, Question 4

In the very first example of negative externalities, Wheelan describes a situation in a film of an agribusiness company dumping pollutants into the local water supply, similar to our in class story of Grunge Inc. However, the film showed that the only solution to this matter was through government intervention. Later in the chapter, we find out that it is possible to solve such an issue, according to Coase who says that "the private parties will always come to the same efficient solution." This is to say that once the people get fed up with the cancerous pollution, they will go to the company and work out a deal that best suits everyone. Success here seems very probable as it has happened before.

Kate Brown Ch 3 Q 6

 There were two topics that I found to be the most interesting. First was the topic that addressed the idea of "who owns what?" This is a very important question and is a good example of when it is necessary for the governmnet to step in. In the case of the neighbor who plays the bongos the government determines whether you have the right to silence or whether you should have to pay for it. This brings up the question of international things and how to determine what nation owns what. The second topic that I found interesting is simialr to the first. Wheelan discusses whether people who haven't actaully paid for something (such as a park or lighthouse) should still be able to benefit from it. Obviously you aren't going to tell the captin of a ship to close his eyes when passing a lighthouse because he didn't pay for it but it is also important to find a way to stop free riders from crippling enterprises as they did in Stephan King's online book experiment.

Maggie Chamberlain, Chapter 3, Question 4

Wheelan proposes that we tax the source of the negative externalities, such as placing a tax on gas or emissions from a car rather than raising the price of the car itself. I initially liked the idea, since it would discourage a behavior that has negative externalities, driving, and would allow for a decreased tax on things like income, a behavior that should to be encouraged. However, this plan would not have perfect, long-lasting results. Each individual is different, so, using the vehicle example, if you raise the price of driving a bigger car to $9 a gallon, you might be preventing the contractor who needs the truck to haul lumber but can't afford such an expensive car from getting a suitable car for his needs. A large power can't control everything. Government must be seen as a necessary overseer, and many issues must be solved between individuals or smaller parties, using the Coase Theory, in order to more directly change one party's behavior from forcing its negative externalities upon another party.

Derik Graham, Chapter 3, Question 6

The section of this chapter that I found most interesting is the section where Wheelan talked about activities that cause both positive and negative externalities. Wheelan's example was smokers. In his situation smoking caused negative externalities because it will eventually kill the smoker, and because second-hand smoke can be detrimental to those around a smoker. Smoking also caused positive externalities because it kills the smoker faster than a nonsmoker which means that they cannot collect on Social Security which they have been paying into their entire working life and nonsmokers are able to get a return on more than what they paid for. This certainly does pose a benefit to those who choose not to smoke, but my question is for those smokers whos deaths are prolonged or sicknesses treated by medical care is the social cost of taking care of them outweighed?

Gracia Gilreath, Chapter 3, Question 6

In this chapter, I particularly found the section about comparing the production of car emissions to eating ice cream very interesting. The section was short, but it made a valid point about how our personal behaviors and decisions can affect us and/or the world. If was choose to eat ice cream we should eat it every once in while, just as we should choose to drive our gas-guzzler truck sparingly because the ice cream causes heart disease and the car emissions cause global warming. In order to ensure that these decisions are made the cost should be raised. If the cost is raised on ice cream or gas, then people will only buy ice cream on some occasions and the truck will only be used when absolutely needed. Therefore, the risks that come with these decisions will decrease and will in turn benefit the most people in the long run.

Chapter 3 Question 6

A part that stuck out to me was in the beginning when he was talking about buying a new car based on his current needs at the time. At first he owned a Honda Civic then got a Ford Explorer based on the needs of his growing family and their safety. He got a car that was more practical for him and his family but it did more harm to the other around him because his new car is less fuel-efficient. He thought of the pros and cons for buying this new car, but he mainly focused on how he and his family would be effected, and not everyone else who could be effected in the long run. I think when talking about externalities, especially negative ones, it is easy to think about things like smoking, which seems obvious how it can negatively effect the people who are surrounded by smokers but I think most people (well for me at least, not that I've had to make that many choices that could impact that many people) don't really think all the way through about the things they do or buy on how they will effect people as a whole rather than just themselves.

Chapter 3 ~ Question 4/6 ~ Griffin Snow

This chapter was all about solving problems using economics. I really enjoyed reading about the problems brought up with externality, and the solutions people have proposed to fix, or at least reduce the damage dealt, these very relevant topics. One of the first examples from Wheelan was of taxation of large trucks, or cars that get very bad gas mileage. Looking at the problem, it would seem like that would reduce the total emissions, and help the environment, fixing the initial problem. However, as this might fix the initial proposed problem, would this cause more problems for the people who use these trucks for business, not for leisure? If the tax was placed, this might not allow for a worker to afford to buy the truck to haul lumber or pull a trailer, while someone who is rich enough to drive the truck "to the grocery store" would not be effected by the tax anyways. As far as solutions go, there never seems to be one answer. He talked about the question given by Nobel Prize winner Amartya Sen, who hypothetically was going to hire workers. There was one position to fill, but 3 applicants. If they all have equal qualifications, how do you choose between them? The only difference is how the decision affects them personally. One of them was poor, one seemed slightly depressed, and one had health problems that could be fixed by the money acquired from the job. She had many interesting ideas on which to hire, but there is no right answer. This type of problem solving stuck out to me, because when there is no right or wrong answer, what do you?

Question 6. What stuck out to me was brought up it in page 90. I found Mr. Becker fishing experience in Cape Cod pretty interesting. How the government imposed a quota on the quantity of bass being caught, but this in Mr. Becker's views was a detrimental design. The government thought that if they lowered a set maximum on catching fish that it would preserve bass in that area. But unfortunate they were wrong people out of context would catch as much fish as they could at the beginning of the season which left none for people who fish during the season. Many people fished in groups which insight would give a bigger total of fish caught then those who fish alone. Eventually a law was passed but the Government left a sticky mess. Cape Cod is known for freshwater fish, why would the government want to ruin that?

Elyse Melling, Ch 3, Question 6

One of the interesting parts of chapter three that stuck out to me was the part about the government involvement with smoking and Social security. Ordinarily, one would say that a smoker is causing negative side effects towards the population of non smokers. Wheelan says that smokers actually provide a benefit to non smokers. Due to the fact that the average smoker will most likely die about seven years earlier than a non smoker, they won't be able to collect their Social Security and private pension fund benefits. This means that non smokers would get more out of the situation than smokers. An example that Wheelan gave was about the Czech Republic. The report showed that premature deaths from smoking saved the Czech Republic about "$28 million each year in pension and old age housing benefits." I think this example of how smokers affect non smokers is very interesting and can be compared to other issues that intertwine government with economy and how externalities fit into each situation.

Jacob Besser, Chapter 2, Question 7

The part of this chapter that I found most interesting is how London is using incentives to reduce traffic in the central London area. Adding that extra 5 euro charge to anyone who wants to travel in a motor vehicle in central London is a very good way of increasing the gainz for the government as well as increasing traffic safety and reducing congestion within the central London area. The question that is pressing me is how the system London has put in place reduces traffic while similar systems of toll roads in the United States don't reduce traffic in a similar magnitude. It will be curious to see in what other situation monetary incentives would have such an impact.

Erik Dahlman, Chapter 2, Question 6

The concept of incentives is extremely interesting as with the right incentives, you can achieve anything, such as clean air, but with the wrong incentives, you end up with the wrong solution, not solving the most simple of problems, for example telling people to simply not drive for one day. Incentives is a finicky issue as it is so easy to get wrong and the consiquences are huge if they are done wrong.

Griffin Snow ~ Chapter 2 ~ Question 7

I learned more about incentives and the reasoning behind decision making in this chapter. The passage about the black rhinos and conservation of rain forests in East Africa and South America. We have been introduced to incentives in class with the example of the ship captains transferring prisoners, but this chapter let me see an example of a more current example. The most interesting part of the chapter for me was the problem solving of saving the black rhinos, who are being hunted and endangered as a species for their horns. When it was proposed to cut off the horns in order to reduce the incentive of hunting, but the hunters would still kill the rhinos to increase the price of the horns they have, because there are now fewer horns on the market.

Ram CH2 Q3

When I was reading the passage specifically on insensives in London and the traffic control with the eight dollars or you could pay the fine for some hundred of dollars (130). I thought about obesity and using insensitive to control our future the health or our citizens and the mortality rate of people and obesity as a disease. I would suggest that we put some kind of intensives when buying fast food. A suggestion is that you have to buy and eat a certain amount of healthy foods before you can have the trash food. Or that you can eat trash food, but you then have to work that off or some kind of fine would be ensured. It would cause people to stop buying fast food and then to work off the fat. People have natural intensives in there daily life, but people don't hold on to them  (new years res) we would insure that they keep them.

Question 6. I found that the overview of Incentives in chapter 7 were quite interesting. How London was able to add incentives to regulate traffic flow which in the end result would decease amount of drivers as a whole, but what if American would add incentives on Driving. Would that aggravate drivers in large populated cities or would it help? Could incentives regulate online shopping or smoking would this be able to create a less consuming and effective economy?

Hayoung Lim, Chapter 2, Q 6

The thing that stood out to me the most in the chapter was at the very end. Within the entirety of this chapter he speakes of the uninteded consequences of imporper usage of incentives to produce an apropriate response. Though it was only at the end when he ties togethor the idea that he hoped to impose onto the reader that I began to see the slipery slope that could incur from weilding incentives. He says that incentives are a "powerful tool" that can be used to "improve the human condition". I would agree with that statement but I wonder the possiblities of misuse of such a power. Who has the athority to tell of what will improve the human condition aand use incentives to push people into submission. Though I do recognize its great benifits I worry of the possible overt use of its abilites to derail freedom of choice. When one begins to force people to pay to ride into the cities or revoke driving privledges I see a fine line being walked upon.

Zach Newton, Chapter 2, Question 6

Many of the incentives-gone-wrong stories were very interesting, but the one that I found to be most significant was the prisoner dilemma which outlined how acting in rational self-interest can in fact lead to poor results. Because both prisoners kinda wanted the "light" three year sentence to remain a possibility, both paid the consequence of twenty five years, rather than taking the much lighter five year sentence. This story made me wonder what I would do in this scenario, and I think, unless my accomplice was someone who had taken this class and read the chapter, I would do the same thing. I am disappointed to do the same thing, but it is much better than a life sentence.

Kate Brown Ch 2 Q6

A passage that stood out to me was the one about how much teachers get paid. People are always hearing about how teachers don't get paid enough. Despite the fact that that is true the reason behind it was something I had never thought of before. The incentive behind how much teachers get paid is that the people who are above average in intelligence will do something that will pay on a productivity basis. It also proves that those who remain teachers are those who are the most dedicated. The problem with this is that when a highly intelligent person looks for work outside of the educational system they are not passing their knowledge onto the next generation. At the same time those who fall back on the job of teaching not because they feel as though they can be beneficial to the field but rather because there is simply nothing else they are capable of doing, end up being the ones shaping the next generation.

Marisa WhiteChapter 2 Question 6

A passage that stood out to me was about the prisoners. The two prisoners both wanted what would benefit each individual more which ended up having a negative consequence because they both ended up with more jail time then if they both would have kept their mouths shut. I think this shows that sometimes you can't just think about what will benefit you the most. You also need to think about what the worst outcome could be, especially when you have no idea with another person might do. There seems to be an element of trust that must be had in a perfect economy. This is similar to the story about limiting the amount of fish being caught or just having a free for all, because each person is going to want all they can get. A fisherman in Rhode Island said that he has no intention of saving the fish because someone else is going to get it if he doesn't. The flaws in the economy can somewhat be blamed for the lack of trust among people due selfish people who always want what's best for them. People need to think about all of the consequences and take into consideration what can happen if what you want doesn't happen since other people can be unpredictable.

Derik Graham, Chapter 2, Question 2

The central idea of this chapter (incentives) is, and will be highly relevant to me the rest of my life. Even now my parents give me incentive to do things for them, and I respond to them based upon if mine and theirs align, or are similar. For the rest of my life incentives will rule how and why i make certain descisions to better myself and being able to destinguish them will be key. Wheelan did an excellent job of providing examples of when invcentives work correctly and also when they when they go drastically wrong. He also explained exactly why they worked the way that they did, which provides a greater understanding of incentives, which leads to a knowledge of how to get them to work in our favor later in life.

Elyse Melling, Ch. 2, Question 6

Chapter two was very interesting. It was interesting to find out about how incentives play into economics. In particular, the part about the black rhinoceros market in southern Africa. The incentives behind killing the black rhinoceros were similar to those of selling drugs or cheating on taxes. "They can make a lot of money relative to the risk of getting caught". The market for the black rhino affects many other markets. Tour and safari operators, as well as conservation officials. The example of the black rhino market can be compared to many other economic situations that take place every day, and how incentives play into all of those.

Gracia Gilreath, Chapter 2, Question 2

Within the chapter, Wheelan states that we as consumers should look to hire someone who has similar incentives, but not identical incentives because in the long-run it can be more beneficial for both rather than just one or the other. For example, when buying and selling a house, a real estate agent wants to do his job quickly no matter if it is more beneficial to you as a seller. By getting his job done quicker, he is able to make a decent profit, while not having to do much work and can therefore move on to another customer where he can perform the same process. In a year, he sells more houses and makes more money by setting the price lower and selling more quickly, than setting the price higher and spending more time selling the house. The house does get sold, but the sellers do not make as much profit as they could have because their real estate agent has their own best interest in mind.

Maggie Chamberlain, Chapter 2, Question 6

Incentives matter. In fact, with the right incentive, you can save lives or help the environment. I liked Wheelans example of Mexico City's air pollution combat strategy. Telling people in New Mexico to stay off the road for one day each week only worsened the problem. You can't tell people to just not drive for a whole day. Most people are going to have to get somewhere and they're going to find a way around the system. If they can afford another car, they'll buy or use another car, that way they won't ever have to worry about taking a full day off from driving. This consequently worsens the problem because now there are more cars letting out yet more emissions. This is worse for the environment. The best solution to the problem of air pollution would just be to raise the price of gas or in some other way make the price of driving or even the risk of driving higher. If the price of driving is greater, then less people will drive and there will be less of an issue with air pollution.

Griffin Snow ~ Chapter 7 ~ Q6

I found the parts of the chapter about investing and stock research the most interesting. I have never had a very deep understanding about the stock market, so it was new information to read about. When talking about buying personal stocks, the randomness of the trading and investments is interesting because there is really no way to know if you can make lots of money, or if you will lose it all in one swoop. Having a diverse type of investments increases your chances on doing well (or, not losing as much money), but it is still more random than I would have ever thought before reading the chapter. Risks have to be taken to make money by investing, but it seems that most of the time the risk is greater than the reward .

Ram Chapter 7 Q7

The section that I found most useful was Take risk, earn reward. Risk being the key word. What I am taking from this chapter in terms of investments and when I get older hopefully stocks and bonds. I like the key idea that he mentioned which was "You will be compensated for taking more risk" which can extrapolate  on average more return the more out there you portfolio is. This is an interesting idea and something i will keep in mind now when making investments in to properties keeping in mind that I am extrapolating this idea from the books idea in finance. The basic and key idea of this concept is that Risk is reward and this can open a perspective not only in financial decisions, but life decisions as well.

Jacob Besser, Chapter 7, Question 7

The most interesting things I learned about in this chapter were about bonds and insurance. I found it very interesting that people would start a business where they want to pay off peoples problems. While I see the profit in it now but the original idea of paying for others peoples accidents and turning a profit from it must have been crazy. The part about people buying bonds for the world cup was rather strange and didn't make sense to me but I guess that's soccer fans for ya.

Question 6: Chapter 7 was very interesting especially when they talked about the stock market. When they made the analogy of the houses in New York it really changed my perspective as a whole. How there has to be a set price on everything or else buyers and sellers are experiencing fraud. Connecting to the stock market in this case when they are able to sell stocks at a set price and the eventually rise and fall will occur, but if the stock shares are being sold at a higher price then there is an insufficient number and is against the law. I would also like to talk about how having a spare capital will always work in your favor and within that spare capital you are not only at an advantage but are able to spend less than you earn.

-Ford Schroeder

Catherine Dustrude • Chapter 7 • Question 6

The section that stuck out to me the most was about financial instruments and the four most important aspects: raising money, protecting it, taking risks, and inferring what may change and how. These four things could even be applied to any good or service, and could specify just by applying small changes. This truly is the the naked, simple version of Econ, which helps me to understand just how much common sense is involved. One question I had while reading the chapter was in the Raising Capital section, page 151. What does it mean that the lady in Uganda had a repayment rate on the micro-loans of 96 percent? Or is that the microcredit lender who had the repayment rate so high? What is a repayment rate?

Hayoung Lim, Chapter 7, Question 7

Something that stuck out to me when reading Chapter 7 was the idea that there is virtually no chance of getting an amazing deal such as the Brownstone listed for 250,000 when its worth 500,000. I had always though that with a free market I was fortunate because I love to try to find crazy deals online to get the same items for as cheap as possible, but reading this portion of the the chapter has made me question if this is a reality. It makes seems obvious when he explains that we are trying to maximize our own utility and so is everyone else, which is why bargains like that do not exist. This equal amounts of pull by all people in the market makes for things to always ends up moving to fixed equilibrium. It is amazing to me that with a free market prices can level out to match the supply and demand. Though it is worrying what controlled pricing done by floors and ceilings can effect the market.

Gracia Gilreath, Chapter 7, Question 6

I thought the passage on diversifying was interesting because when making investments, a person shouldn't invest all their money in one thing, but many so that they have a greater chance of ending with a greater outcome. However, selecting what to invest in is important because if by chance you invest in two separate companies that make the same type of products and one does poorly, it is very likely that the other will too. By investing in other companies, which are completely different you have a better chance of gaining than losing from you investment. In fact, it is very unlikely that you would not benefit from at least one of your investments if they were spread out in the correct way.

Erik Dahlman, Chapter 7, Question 6

The passage concerning the two economists walking down the street, seeing a hundred dollar bill, and assuming that it isn't actually one since someone would have picked it up by then as well as the part concerning herd-like behavior combined with excessive confidence in our own abilities struck me as significant. I do not believe that I completely am subject to these categories but I have been around this behavior so often that I didn't really recognize it for what it was until it was explained in this book. The fact that this type of behavior is so common, yet so limiting to humans seems extraordinary to me.

Elyse Melling, Ch. 7, Question 6

I found the section on neuroeconomics to be very interesting. I didn't previously know that biology is being incorporated so heavily into the world of money. Economics, cognitive neuroscience, and psychology are all being incorporated into one group. I also found the part about people with brain damage being good investors to be interesting. Due to the fact that the part of the brain involved with emotion is damaged, the group of patients were able to perform with a more positive outcome than the group without brain damage. This really shows how weighing your risks and benefits comes into play when making investment decisions.

Kate Brown Ch 7 Q6

The passage I found particularly was the one that explained speculation. Using the example of a "loser brother-in-law" Wheelan describes the amount of people/investors that are involved in any credit default swap. The other people involved probably aren't very connected to either the borrower or the lender and therefore must resort to speculation in order to determine whether or not loaning money is a good idea. Wheelan also includes how the lack of investment in research on who will be receiving this loan could have serious negative consequences. If people agreeing to insure your loan to your brother-in-law knew the unlikelyhood of him paying you back they would probably not do it. That is the risk with entering deals so easily. Like the example of choosing a check out line, there will always be factors and information that is either not passed on or not predictable.

Maggie Chamberlain, Chapter 7, Question 6

A passage that stuck out to me as really interesting was the part in which Wheelan compared the stock market to grocery store checkout lines. The stock market has always been somewhat confusing to me, but the analogy he used helped me to understand it's unpredictability. When people are watching stocks, they all have the same information, so they all know to look out for the man with more than one shopping cart or the lady with a handful of coupons, but then everyone is just pushed to the same line without those people in it and the process doesn't move any faster. Similarly, we can watch for predictable signs, like a lady with a handful of coupons, but we can't predict a man who forgot to weigh his avocados. A stock may look good one day, but fail the next. The market is unpredictable because of the signs we can't see.

Elizabeth Chun, ch7, Q7

I found the rules of decent investing to be interesting. I have never invested in anything before, but having the knowledge of theses seems helpful if I ever do. Saving in order to invest seems to be related to the necessary excess capital that was discussed at the beginning of the chapter. Taking risks to earn a bigger reward as well as investing diversely with attention to the future seem to all tie together into having common sense when making decisions, or deciding whether to beginning diets.

Derik Graham, Chapter 7, Question 6/7

The passage that I found the most interesting was that of Wheelan's comparison of his mother-in-law and the Harvard Endowment. This brings me back to the comment I made earlier saying that capitalism is suited for those who are able to compete. What I took away from this section is that financial markets are designed in a way that lets the average Joe invest some money and make some pretty good returns once in a while on his hopefully diversified stocks. The catch however is that the average Joe, unlike the Harvard Endowment, doesn't have large amounts of capital to be spreading across many opportunities. The Harvard Endowment however is able to do so and continues to gain money because it has more to spare. In comes the old saying that to make money you have to spend it. The beauty of the financial market is that it allows everyone to compete, but the people with the most money are able to get the biggest returns.

Zach Newton, Chapter 7, Question 6

One part of the chapter that I found to be particularly interesting was that a monkey throwing towels could do as well in the financial markets on average as a professional Wall Street person.  This is both upsetting to me, but also quite intriguing. My first thought was to never invest my time or money into the stock market if chances of success are so random. Then, I had a much more profound thought. I could start an investment company that uses monkeys as labor, and they can throw towels at one of those virtual reality golf screens. The screen would register where the towels hit and invest accordingly. On the other side of the room there would be food dispensers for each monkey. While this would be a large investment at the start, I think it could pay off in the long run.

Marisa White Chapter 7 Question 7

Something that I never really thought about before is when money is being saved due to inflation the money would decrease in value, like in the story about the sultan of Brunei. That seems to be the opposite about of what you normally hear when you are constantly told as a teenager to save your money. Also by just saving money instead of investing it, it is an opportunity cost of more money you could be making. I also learned about all the different types of insurance that is offered like the "win insurance" for the U.S. Open or the "cancellation bonds" to protect against terrorism regarding the World Cup. This chapter taught me that it is smart to invest money but you need to be smart when choosing what to invest in, like doing research on a stock because maybe there is a reason people are selling it. This part of the chapter kind of relates to chapter 5 that we just read, which talked about gathering all information or as much possible before making any decisions.

Catherine Dustrude • Chapter 5 • Question 2

These issues directly affect our lives! These examples: health insurance, medical procedures, it's all a scam in one way or another. It's hard to believe that doctors would withhold procedures when there is a financial bonus if tests are not administered, etc. the doctors take an oath too, basically saying they won't be irrational, they'll help people in a sane manner... It's just like the captain who withheld food from passengers until there was a monetary reason for him to keep them alive. Yes, everyone is out to get money, but the insurance companies, trying to target specific groups of people... And the businesses not hiring a woman over a man because of society's stereotypes... That's just sad. SMH. 

Elizabeth Chun, Ch 5, Q6

Something that stuck out to me was at the beginning of the chapter and the idea of asymmetrical knowledge between the consumers and sellers in situations such as buying used cars. I had not thought about "the market for lemons" before or even known about it, although it does make a lot of sense. I was also surprised that many employers would still choose an equally qualified white person over a black person because of statistics. The author discussed the qualifications for the job, however did not discuss the comparison of how the person talks or presents themselves which I would consider to be much more important factors than simply the race of two successful business men.

Jacob Besser, Chapter 5, Question 5

The issues discussed in chapter 5 are quite controversial with gender discrimination and race discrimination as major points in the chapter. The two sides for these issues are obviously the people directly effected by them like young women who are less likely to get a job just because their employer might have to pay maternity leave or blacks who who try to get the same job over a white person arguing against this discrimination while the employers argue for it because of economic benefits for them. While these issues don't negatively effect my chances of getting a job, I am against them because it is unfair to my peers that their chances at a job are lower than mine even though they are equal in qualification.

Erik Dahlman, Chapter 5, Question 5

The issues that are raised in this chapter are extremely controversial at the current time with the affordable care act and the focus on health insurance. Because of this the Democratic Party are aligned with the side for the affordable care act, and the Republican Party are opposed to the affordable care act. I do not really know where I fall in this issue as I have never had reason for it to immediately concern me and thus never looked into it.

Hayoung Lim, Chapter 5, Question #5

I find that the issues presented in this chapter are inspiring to those new to economics. The controversy comes into play though when there is the possibility that ones individual rights could be taken. The concept of personal mandates does fix the issue of adverse selection, wherein those who are most prone to sickness are placed into a high liability category making health insurance for those few more expensive as well as hard to obtain. But one must think about this with the overarching consideration of cost benefit analysis. The cost for improving upon the current situation with health care is to force those who do not wish to pay for health insurance to do so. Personally I believe that the benefit does out way the cost, in that it will encourage the fair treatment and well being of citizens. Though the question rises if the government has the right to have so much dominion over our individual actions.

Griffin Snow ~ Chapter 5 ~ Q7

The most interesting thing I learned from this chapter was how economics was such a large part of decision making- whether it be hiring a new lawyer for your firm, or providing health care for those with life threatening diseases. I was interested in the idea behind hiring a man vs. a woman because it has been such a controversial topic in recent years, but also because I never thought about the issue from the side of the company. If you hire a woman who then goes and starts a family and then quits after taking her maternity leave (while getting paid), as a company you are losing money in places you don't have to. By hiring a male, he most likely will not be taking leave to take care of his children, not because it is impossible, but improbable. If you have no information about society norms or previous hiring experience, there is no reason not to hire either one. But, because company's have had female workers quit after maternity leave, that gives them incentive to hire a male, even if the woman has the same, or better, credentials for the job. The flow of information and how it affects our decisions is a very interesting topic to me- similarly to the economic advertising (with adding the fake price to get something "free"). I never would have thought economics would be in so many places.

Zach Newton, Chapter 5, Question 2

These issues do indeed affect my life directly. The three cases that immediately stand out as applying to my life in the next 5 or so years and onward are college branding, student loans, and health care. The three colleges that I have applied to and want to go to are Iowa State University, Univeristy of Colorado Boulder, and University of Michigan. According to the study mentioned in the chapter, I would get paid, on average, significantly less after graduation from Iowa State (an easy school to get into) than I would after graduating from Michigan (who accepts around 33% of applicants). Student loans will also be an issue if I go to Michigan to get paid more because, of course, it costs more: $30,000 more as a matter of fact. Health care will also take affect upon graduating college or maybe even during college; I don't really know how it works. As a healthy individual, I would prefer to have healthcare just in case, but I would not like to pay for unhealthy individuals.

Kate Brown Chapter 5 Question 6

The passage/concept that I found the most interesting was the idea of economic decisions causing social issues. The fact that a man is more likely to get a job than a woman of equal qualifications not based on sexist standards but rather based on economic efficiancy is very interesting. The same goes for race. Based on statistics it makes more sense for a company to hire a white person rather than a black person. This passage frustrated me because although it made sense it seems that there must be solution to this problem. Even though these are economically rational decisions, they are condoning social issues that are negatively affecting society. Lack of information although sometimes a good thing is causing major rifts in social groups today.

Elyse Melling, Chapter 5, Question 6

I found the recurring topic of adverse selection to be very interesting.  At the beginning of the chapter, Wheelan talked about Clinton's idea of Hope Scholarships. "The plan was designed to address the concern that students graduating with large debts are forced to do well rather than good.... Administrators could determine the average post-graduation salary for eligible students and then calculate the percentage of income they would have to pay in order for the program to recoup its costs." So, for example, a brain surgeon would have to pay back more than a Peace Corps worker. The result of this idea was that the higher the income that people received, the more often they withdrew from the program (They figured that paying a conventional loan would be cheaper than paying the program). This idea of adverse selection came up again later in the chapter when the story of the insurance policy aimed towards fifty year old men. Eventually, the most healthy of these men dropped out of the program, then the next most healthy dropped out, and so on, until only the sickest men were left. The cost for insuring these men wasn't covered, so in theory, the cycle could continue until the insurance policy failed. I think the idea of adverse selection can be applied to many areas in economics and so therefore it is useful to know.

Ram, Chapter 5 Q2

Do these some of these problems effect our life. Simply put yes they do and the have. I am going to bring up the insurance and the examples that Wheelan provided with healthcare. The issues with how you enjoy life day to day effect how often you go to the doctor and how your insurance company thinks of you. This extrapolated is how much your going to have to pay and for your policy. If as mentioned in the book engaging in risky sexual behavior your more likely to get categorized differently than a married man or woman. Same thing that can effect our lives that I thought about when I was reading that passage is the difference in cost of health insurance from a doctor to a underwater welder. These decisions can change our economic thinking drastically even if we are totally oblivious to the fact when choosing a major for example. To get back to the point these issues do and continue to effect our our lives even at the age of 17 and 18.

Marisa White Chapter 5 Question 2/7

I think the issue regarding requiring information can relate to everyone on a daily basis and always will. When you are buying things you want to know about the product or service you are about to spend your money one, and know that it is worth the money. I think that can relate directly to the used car example. Whoever sold the car must have had a reason for not wanting it any more, and if those reasons are bad ones that may have an effect on your choice of car. Another thing that I found interesting and relates to everyone was the examples of healthcare. I didn't know that people who were expected to be very sick when they become older, or are already unhealthy can be denied certain insurance. Also it is discomforting that doctors may deny you the care you need because of an economic incentive. All of these examples drive the conclusion that having all of the right information is a big part of being a good economist.

Gracia Gilreath, Chapter 5, Question 6

I thought it was very interesting when Wheelan discusses why a male may get a job over a female, towards the beginning of the chapter. The business firms tend to think more about what is best for their future because they believe that a female may have a pregnancy in the near future and that may cause them problems because not only could the woman take a payed maternity leave, where work is not being done, but also she could possibly quit the firm, causing the business to have to rehire anyways. They hire the male because it is less likely that he will leave the firm. I found this interesting because before I read this example, I always thought that firms did this because of sexist intentions in that men are better than women. However, these initial assumptions can backfire when a female, who is not thinking about having a child anytime soon, is turned down and a male is hired who plans to stay at home when his wife has a child. Lack of information is typically not beneficial, in fact, "what we don't know can hurt us."

Derik Graham, Chapter 5, question 6/2

The passage that struck me as interesting, but also because of its implications in my life, came at the end of the chapter where Wheelan talking about judging books by their covers and the "signals" that we encounter in our economic world. In particular, the section on where students graduate from and how that effects their predicted later income was most significant. I feel that it is applicable to us as students, appropriate, and true to conclude that as students of Minnehaha Academy we have a slight atvantage over other students. This is not to say we are better, or are the best school, but when people hear that name it has an impact, much like companies and branding. I would conclude that where we have gone to school has very much impacted our ability to get into college, as well as increase the calliber of said colleges, based on our preparation and a recognition that MA has proved their students worth. The example of college is a slightly altered microcosm from the real world examples that Wheelan describes and I would propose that the fact that we have gone to MA will have beneficial implications for our futures, which demonstates that if we are going to be judged later on our appearances and where we started, that we have good odds to be sucessful later in life.

Maggie Chamberlain, Chapter 5, Question #7

From this chapter, my eyes have been opened to the importance of information. A lack of information leads to false conclusions that stem from stereotypes and generalizations on certain groups of people. I thought it was especially interesting when Wheelan mentioned how not knowing a candidates criminal record could actually be racially discriminating and detrimental to the black candidate because, even if the black candidate is perfectly innocent, the employer is going to assume the worst given that 28% of black males have served time in prison, whereas 4% of white males have served time in prison. But, in that case, comparing a black candidate to a white candidate of equal merit would result in a more equal hiring decision if it was known that both had never served time in prison. Knowing information such as that can help certain candidates in the long run if they do have a clean record because it will save them from being stereotyped.