Chapter Journaling #5

I found Chapter 5 to be slightly more challenging compared to the previous 4 chapters we read in the textbook. This chapter really builds on the previous chapter concept of supply and demand.  The concept of the price elasticity of demand measures how much the quantity demanded responds to a change in price. That means a good of high elasticity would mean a change in price would result in a huge difference of how much people want to buy the certain good. An inelastic good, like food, would have a very similar value of quantity demanded despite a major change in price. The elasticity concept is not too difficult to understand; however, the graphs really threw me off with the concept. Figure 4 in Chapter 5 confused me the most because the slope is constant but the elasticity changes midway through the graph. As I gain exposure to the graphs more, I'll be able to grasp the concept. On another topic, the total revenue is the amount paid by buyers and received by sellers of the good. To find the total revenue, you would find the area under the certain points of the graph.  I can see how being able to find the total revenue on a graph is extremely helpful. With that knowledge, you can determine which price/quantity will result in the largest revenue for the sellers. Overall, I would rate this chapter a 3 out of 5.  The chapter is a little difficult and takes a little bit more time, but it's certainly interesting.

Article Review #1

     I found the article "Why Keynesian Chorus is Cackling like Chicken Little" extremely challenging to read. It took me a while to read this article and I had to refer to a dictionary every couple sentences because of the large economic vocabulary that I was not familiar with. The difficulty of this article would be a three on the three point scale described on the home economics page. 
     I believe Stockman's thesis in this article is that the federal government is printing way too much money and pumping most of that printed money into Wall Street big firms which results in the creation of a large financial bubble. According to Stockman, the federal government should just tighten the money on Wall Street. However, a lot of other economists disagree and argue that the market is already tightening America's economy based on the "financial conditions" that is measured by the Goldman Sach's Index. The Goldman Sach's index is flawed because the data tables and graphs are eschewed to their benefit. The federal government expect the money to trickle down to the average Joe when they lend the printed money to Wall Street firms. Low interest rates were expected to help the market but it had a marginal effect because 90% of households are unable to borrow despite these low interest rates. 
     All in all, I have a lot of questions concerning this article. What exactly is a financial bubble? How is the author proposing to fix the issue of the bubble popping soon? What is Keynesian's Economics exact effect on our country's market and how does it affect the average citizen opposed to the C-class of corporate America>

Chapter Journaling #4

The first half of Chapter 4 continued the trend of all of the previous chapters, and I considered the chapter a relatively easy read. On a scale of 1-3, I would rate this chapter a 1 as well. The beginning of chapter 4 keyed in on three specific terms : supply, demand, and market. Mankiw defines a market as a group of buyers and sellers of a particular good or service. There are two opposite forms of markets that are depicted in the text book. There is the perfectly competitive market where the goods offered for sale are exactly, or almost exactly the same and the buyers and sellers are so numerous in count that no one buyer or seller has any sort of influence on the market place. An example of a competitive market would be the places that sell food near Whitney Young which includes Ella's, Billy Goats, and Pepperinos. The polar opposite of the competitive market would be a monopoly; that is when a single seller, or company sets the price in the market for a particular good or service. One example of a monopoly would be Monsanto. Supply and demand was an easy topic to grasp. Personally, I think the easiest way to think of supply and demand is the supply-demand graph. It's a downward slope; it starts with low supply which results in high demand. Then, it gradually shifts to the opposite.Basically, supply and demand has an inverse relationship. The examples in this chapter simplified supply and demand which helped me understand the concept a lot. I have two questions about this chapter. This was on the chapter 1-3 test that i find relative now. Do the governments regulate prices on goods and services to make it more"safe"? That would mean supply and demand can't really take it's natural course. My second question is: how would you graph a supply and demand graph if it involves more than 1 specific good if it's related to one another? 

Chapter Journaling #3

All in all, this chapter was a really interesting read. This chapter's focus was on opportunity cost, comparative advantages, and absolute advantages. The one thing that really surprised about how trade can benefit somebody even though they have an absolute advantage in producing the goods involved in the trade. I would give this chapter a difficulty rating of 1. I found this chapter easy because not only was it a short chapter (11 pages), but there were many examples given in the text to explain the concepts. The Tiger Woods mowing lawns, rancher and farmer situation, and the U.S. and Japan relationship were great examples that made the concept seem relatively easy.