Economic Concepts

  • Market Economy: economic activity such as determining prices is determined by markets (buyers and sellers)
  • Private Enterprise: all resources in the economy, all means of production, labor, equipment, stores, land, all are owned by private individuals or groups of private individuals
    • Private Ownership:
  • Market economy is an ideal, no government intervention
    • But most have government intervention
  • In a free market economy ones income depends  on
    • Quantity of resources you own (labor, real estate, stocks and bonds)
    • Value market places on resources you own
  • For most: Labor is most important resource you own
  • School enhances value of your labor
  • Wealth vs Income:
    • Wealth includes savings and gifts and inheritance/things you own that are not just money
      • Savings is basis for wealth
  • Net worth: assets minus liabilities
  • Labor market decides income
  • Law of Demand
    • As price increases, demand will decrease/amount customers are willing and able to buy
  • Supply-how much sellers are willing and able to sell
  • Profit is a measure of how valuable a product is
  • Law of Supply
    • Firms supply more if the price and demand are higher
  • Prices come from buyers and sellers
  • Surplus-usually causes prices to drop
  • Shortages-prices rise
  • Equilibrium: only point where plans of buyers and sellers meet

Notes from 9/21/18

Epistemology: the study of how we know what we know
• College is about arguments, not facts
• Argument: a claim, and support
• Argument without support is not a good argument
• Must listen to other argument, summarize other POV, express why you agree or disagree
What is knowledge: facts with interpretation
• Knowledge is a collection of arguments of scholars in a field of study
• Natural selection: good arguments rise to top, become main school of thought
How are arguments evaluated:
• What you believe vs. What experts believe
• Longer you study a topic, more likely your views will fall in line with that of the experts
What is an authority?
• When you are new to a subject, you tend to look to experts (authorities) to find basis for your own thought
• Appeal to authority because showing you know what experts think strengthens your opinion/view
Dualistic Thinking:
• Presumes nearly every questions has a unique, correct answer-no other answer
• Most college students think this way
• Answer is right or wrong, no middle ground
Where does expertise come from: two schools of thought
• Rationalism: logic and thinking
• Experience and empirical evidence- Empiricism
Plato’s Cave:

Ragged Dick- Horatio Alger

In discussing the book Ragged Dick by Horatio Alger with peers and two professors, the themes of opportunity and luck were extremely prevalent. An idealistic book that captures the journey of a boy “Ragged Dick” and his rise from a poor boy who shines shoes to scrape by, to a boy with money and education to his name, shows what the author thinks is the American Dream. A portion of the class (FSEM Inequality and the American Dream) felt that Ragged Dick’s rise to “wealth” (in a relative sense) from his impoverished condition was a result of luck, or at least majority luck. The other section disagreed saying that his condition improved because of his determination, morality, and opportunities he seized and worked for. In my opinion, Dick’s ascent was due majority to luck; I am not saying at all that he did not work hard with what he was given, however I see that most of his opportunities were handed to him. He was quite literally handed a five dollar bill that enabled him to start a bank account and find a room to stay in semi-permanently. Without this chance or opportunity handed to him, it is likely he would’ve ended that day with just enough money to get some food for dinner, keeping him in his cycle of poverty. While he did in fact gain an education of sorts at the Sunday School because of his good morals (returning the money he owed a customer), that is also luck that he stumbled upon a customer that was open to helping the boot blacks and was so willing to teach someone who knew close to nothing. This could’ve easily happened to any other boot black boy, or could’ve not happened at all; it is pure luck that he was chosen by this man, not an opportunity that was available to all or an opportunity he created for himself. An overall synopsis of my opinion would be that, although Ragged Dick capitalized on all of the opportunities that came his way, and worked hard with what he was given, most of his rise from “rags to riches” can and should be attributed to luck.