Chp. 5

Chapter 5 is getting a little more in depth with the patterns involved in economics. It's something I've heard about but unlike supply and demand it's something I've never took the time to understand. Last I took the time to understand an "elasticity" concept was with physics. Elasticity in this case is how willing people are to continue buying/selling a certain thing if the price changes. An inelastic demand would be something like food, a necessity. If the price rises you can't just stop eating. An elastic demand is something of a luxury or a narrower/more specific thing that has substitutes, like ice cream. Ice cream is food but is narrow, has many substitutes, and is more of a luxury food not a necessary food. Elasticity and Inelasticity also applies to supply. Except that in the long run price change is elastic whereas in the short run it is more inelastic because it's hard to get an entire firm to change direction unlike a single person that can do whatever they want with there money. The concept was not too bad when it came to understanding it but what I'm not excited about are the calculations. I had to read the midpoint formula thingy majig twice to try and absorb it at least 50%. Also, I'll probably forget once in a while that a linear supply curve is not completely elastic/inelastic. I'll try not to though.

Article #1

"Why the Keynesian Chorus is Cackling Like Chicken Little" included a lot of finger pointing towards people that were making up numbers, data, and measuring systems. Such as the Goldman Index that "consists of financial variables that are so powerfully influenced by Fed Policy" or news speakers that "create appearance of growth and gains in the macro-aggregates by the presumption of theory". I can't verify anything the author says. I don't exactly know who to trust. For all I know the bad guy (if there is one) is the author himself. But the way all the information is presented to me convinces me that Fed policy isn't doing much to help households. Currently big corporations such as wallstreet are borrowing tons of money with very little interest rate which is bad for the economy in the long run because it causes mispricing and generally "does not fuel an outbreak of borrowing and spending" in households. There money currently being spent is just money previously saved. The funny thing is all this is stuff I can't notice, stuff many people don't actually notice.

Chp. 4

Chapter 4 was about Supply and Demand which is pretty fundamental. It's so basic and important you don't have to take an economics class to know about it. Basically the supply available by firms depends on the demand. Each individual that buys a certain object will increase the overall Market demand. The same goes for supply. Each firm that decides to take upon  a business of any sort will contribute to the overall Market Supply. When a factor that is not represented in a graph (income, taste, etc) changes the graph will shift. If it deals with prices and such that are represented in a graph then the market will not shift but simply move along the market/supply curve. Taste is very important when it comes to demand but it is difficult to determine how taste changes/ came to be. The demand of one supply can also determine the demand of another. The two types of relationships would be a substitutional one or a complemental one. So basically Frozen yogurt vs ice cream or Peanut butter and jelly, both of which differentiate by the use of "vs" and "or"....kinda. It can get a little complicated though, such as the cigarettes and marijuana example. I thought theyd be substitutes...but they're complements. 

Chapter 3

Chapter three covered the reasons for Economic interdependence and the gains of trade, hence the title "Interdependence and the gains from trade". It covered key concepts such as absolute advantage and comparative advantage by applying them into a simple world where only a farmer and rancher exist. The farmer and rancher could be antisocial and never speak to each other as they each live their owns lives eating potatoes and meat. Or they could glorify their lives by trading and getting a bigger share of both potatoes and meat. But of course they just can't throw around whatever surplus they have they. There must be some sort of plan to have an efficient trading system, which luckily the rancher figured out and it includes specialization! The rancher has absolute advantage but has the comparative advantage when it comes to meat, so, simply put it, he makes the meat and the farmer makes the potatoes.
That is how the world goes round...most of the time