Rachel Kelsch

ECON 1740 ePortfolio Assignment

Questions:
1. Professor Milton Friedmans research led him to believe in the power of
and
.
Answer 1: Free Markets
Answer 2: Economic Freedom
2. If the government gives everybody the same freedom to work some will do better than
others. The result will be
Answer 1: Equality of opportunity
Answer 2: Equality of outcome

, but not

3. The free market enables people to go into any industry they want; to trade with
whomever they want; to buy in the cheapest market around the world; to sell in the
dearest market around the world. But most important of all, if they fail, ______________.
If they succeed, _______________.
Answer 1: They bear the cost
Answer 2: They get the benefit
4. In the example of the lead pencil, what conclusion did Professor Friedman reach in the
context of invisible hands?
Conclusion: Theres not a single person in the world who could make this pencil.
Remarkable statement? Not at all! The wood from which its made, for all know, comes
from a tree that was cut down in the state of Washington. To cut down that tree, it took a
saw. To make a saw, it took steel. To make the steel, it took iron ore.
5. When a businessman faces trouble, a market threatens to disappear or a new competitor
arises, there are two things he can do. He can turn to the government for a tariff or a
quota (or some other restriction on competition) or he can _________ and _________.
Answer 1: Adjust

Answer 2: Adapt
6. Economists call the constant renewal of the economy _______________. If we want to
increase our wealth and opportunities, we have to stop doing old things in __________
and start doing innovative things in ___________. In other words, we have to be
__________.
Answer 1: Creative destruction
Answer 2: Old ways
Answer 3: Better ways
Answer 4: Creative
7. An example of creative destruction was used in the video. What technology was
created? What was destroyed? Why was this new technology so important?
Created: Cell phones
Destroyed: Landlines and jobs of people who connected homes to wires and repaired
telephone lines
Why important: For boat drivers, so they dont have to shout to each other anymore. For
a farmer in Bangladesh, so she can check the price of eggs in other village markets before
she sells and negotiate a better price. In Tanzania so that customers dont have to wait in
line for hours for the meat to arrive. In Peru so that meat didnt have to wait because the
customers didnt know it was there. Cell phones are used to coordinate.
8. The Founding Fathers had learned the lesson of history. The great danger to freedom is
the ___________________, especially in the hands of a ________________.
Answer 1: Concentration to power
Answer 2: Government
9. As Milton Friedman said, The society that puts equality before freedom will
_________________________. The society that puts freedom before equality will end up
with a __________________________________.
Answer 1: End up with neither
Answer 2: Great measure of both

10. Professor Friedman compares the concept of equality of opportunity to a race where
everyone begins at the starting line at the same time. In contrast, equality of outcome
guarantees that everyone finishes at the same time. Today, equality of outcome is
referred to as fair shares for all. If we applied the fair shares for all concept in this
class, all students would receive an average grade of C. This would be accomplished by
taking points away from students earning As and Bs to give to students earning Ds and
Es. Distributing points equally would result in fair grades for all.
Would you approve of this method in calculating your final grade? Why or

why not?
How would this differ from fair shares for all economically?
For example, whats the difference between a successful student being
required to give up some of his/her hard-earned grade and a successful
person being expected to give more of his/her hard earned income? If you
support redistribution of income and wealth, shouldnt you also be
willing to redistribute academic grades? After all, many of your fellow
students may not have had the advantages in education and upbringing

that youve had.

Address the above questions in your own words, in a minimum of 3
paragraphs.

I dont think that redistribution would be a good method in calculating our final grades
because the reason that we have tests and grades is to prove that were learning something from
the class that were taking. Having grades at all would be pointless if that was the method used to
calculate grades. The students who actually study, read the book, and complete the assignments
are the ones who are learning and therefore should receive a higher grade. Imagine if
redistribution of grades was actually used asking any kind of professional to do anything for

you could be potentially terrifying. You could hire a plumber or electrician and not know if they
were going to fix your problem or make it much worse. If you were going to see a doctor or a
surgeon, you would just have to cross your fingers that your doctor was one who had actually
studied and learned what needs to be known in order to work in the medical field. Grades help to
weed out the motivated from the unmotivated, and the knowledgeable from the
unknowledgeable, so redistribution of grades would bring disastrous consequences.
Similarly, fair shares for all should not be enforced because that would be taking away
the wealth from those who studied, or learned from trial and error, how to be successful in
their field. Thats obviously not fair, even if there are equal opportunities and everyone
supposedly starts at the same starting line. In reality, people dont actually start at the same time
or at the same place.
Some children are born in poverty with very little opportunity for education, and other
children are born to millionaire families and will be able to attend private schools and have tutors
for their whole lives. Does that qualify as equal opportunity? We like to talk about The
American Dream and say that anyone could go from rags to riches if he were to work hard
enough, when truthfully, that isnt the case. The free market does give those people more
opportunity to rise to the top, but its still unattainable for most, just as some people would never
be able to maintain good grades while others do it with ease. I dont have a real solution for this
situation, but I can see why its such a controversial topic.
Reflective Writing:
Watching the video and completing this assignments helped me to develop the knowledge
and skills to be civically engaged. In the video, Norberg and Friedman both talk about

government and the economy in many different countries and in different time periods of history.
Because of this assignment, I now am able to recognize what varying levels of economic
freedom may look like in countries around the world. Im also able to more easily identify what
kinds of things may be consequences of having much or little economic freedom.
This assignment, especially question number ten, helped me to think critically and
creatively. Its one thing to learn about an idea, but thinking critically about whether or not you
agree with the idea is something completely different. I had to think about examples that Ive
seen first-hand as well as read or heard about elsewhere. I also incorporated some of what Id
learned from previous classes here at Salt Lake Community College. All of these things
combined helped me to form an opinion on some of the ideas presented in the video.