Академический Документы
Профессиональный Документы
Культура Документы
Term:
Fall 2004
Course Number:
ECO 2013-168
Meeting Times
and Location:
Tuesday/Thursday @ 9:25-10:40
042-1020
L.A. Woods
Office Hours:
Phone:
[904] 646-2641
E-mail:
lwoods@unf.edu
Required Texts:
Outside Readings:
Additional
Requirements:
Daily
Each student is expected to be well informed on current economic issues -both domestic and international -- by reading the Investor=s Business
(especially the Monday issues, which are sold on the newsstands on
Saturday) or the Wall Street Journal; and by viewing Market Wrap
on
a daily
Introduction/background/housekeeping
Aug. 26Sept. 16
Aug. 27
Sept. 7
First of the article reviews is due. One is due each week for the next 10
weeks.
Sept. 21
FIRST QUIZ
Sept. 23 Oct. 14
Oct. 19
SECOND QUIZ
Oct. 21
Oct. 21 -
Dec. 2
Nov. 8
Nov. 11
Nov. 25
HOLIDAY Thanksgiving
Dec. 3
Dec. 4
Dec. 10
EXAM PERIOD
Dec. 7
Grading:
Three, equally weighted quizzes will comprise 86% of the final grade. The
remaining 14% of the final grade will be determined by the outside readings
and summaries. The following aggregate grading scale will be used:
350 to 323 (100% to 93%) ............... A
322 to 298 (92% to 86%) ................. B
297 to 270 (85% to 77%) ................. C
269 to 242 (76% to 70%) ................. D
Less than 242 (69%) ..................... F
Things to
Ponder:
James D. Gwartney and Richard L. Stroup. 1993. What Everyone Should Know About
Economics and Prosperity. Tallahassee, FL: The James Madison Institute.
Purpose of using this book eliminate economic ignorance! Many notions that people hold about
economics are in error, largely because they have been given the theoretical mechanics, but not the broader
rudimentary concepts that form the structural framework, e.g., the law of demand vs. incentives matter. It also
adheres to the militarys KISS [Keep It Simple, Stupid] principle.
The authors open with a simple statement that incorporates one of the key elements of economics
theres no such thing as a free lunch (TANSTAAFL). We realize that your time is valuable. (iv) Embedded in
this statement is the recognition that: (i) resources, including your time, are scarce (the law of scarcity; and (ii)
they can be put to alternative uses (they have an alternative or opportunity cost). One of the primary reasons that
learning the basic economic principles outlined in the book is that they: enhance your ability to differentiate
between sound arguments and economic nonsense, i.e., separate the truth from the BS that constantly presented in
the media. Often the media elite make misleading statements such as: Gasoline prices are at an all time high.
Which is true, if you fail to discount prices for the influence of inflation, brought to us by the governments ability
to print (create) money without constraint. Ask yourself, what has happened to the five-cent Hershey bar. Equally
misleading is their confusion over Revenue and Profit when reporting Oil companies profits are up 350 percent!,
when the true metric was Gross Revenue. And, again, Health care costs (prices) are too high in the United States,
implying that this is a result of greedy businesses and medical professionals, without inquiring further about WHY
they are high! Without too much effort, it is possible to deduce several reasonable reasons that account for the high
costs, though not necessarily in order of importance:
(i)
(ii)
the greed of tort lawyers (Fast Eddy Farah and John Edwards);
[skimming-off 33%, PLUS costs from the gross award,
results in higher premiums paid by doctors for mal-practice
insurance, translating into even higher bills to health
insurance companies and consumers. Transfer wealth from
those that have to themselves.] and
(iii)
Economic ignorance seems to stem from a concentration on the theoretical mechanics rather than
focusing on the basic principles. This results in a tuning-out of students. The key principles have been provided to
people from the cradle onward, but without simple approaches to the messages, e.g.,
Aesops fable of the Grasshopper and the Ants what is the message of the
fable? Simply, it is self-reliance and self-responsibility! Rather than
accepting responsibility it is easier (more convenient?) to seek selfabsolution by passing the blame or responsibility onto others or society
as a whole, e.g., the old Flip Wilson character (Geraldine) The Devil
made me do it! Place reliance on some third party to take responsibility
the government, disregarding its inability to effectively/efficiently solve
real human problems because of its propensity to distort markets and to
create unintended consequences.
The childs story, Chicken Little, has a message, too: THINK, dont be
stampeded into life-(changing) threatening decisions on the basis of faulty
information, no matter how loud the message is shouted or how often!
The sky is falling! The sky is falling! Would Turkey Lurky and Ducky
Lucky and all the other barnyard critters have been better-off had they just
sat down and thought Chicken Littles foolishness through. But, what did
they do? They followed a self-appointed false prophet (Foxy Loxy) to
there doom. Are there many self-appointed false prophets out there?
Count on it! Global warming, the population bomb has exploded (Thomas Malthus and Paul
Ehrlich) genetically modified (GM) foods (Jeramy Rifkin), and vaccines will harm children, to
name a few!
The Little Red Hen provides an additional example of a childs story with a
profound message the role of incentives and property rights (physical/ intellectual and
individual/group) in a well-ordered barnyard or society. We are always and everywhere
constrained by scarcity, whether of resources or of time. This reality means that ALL human
needs/wants cannot be satisfied at a moment in time, consequently some individuals have more
than others an uneven distribution of looks, income, wealth, land. Those that have less would
always like to have more. Hence laws and their enforcement are necessary. An unspoken truth of
the tale, expressed by the Little Red hen is a property right to her and her childrens labor we
worked to produce the final product, and it is ours to use as we see fit. Keep in mind the Three
Inalienable Rights espoused by the Founding Fathers Life, Liberty and Pursuit of Happiness,
remember they were barrowed from John Lockes Life, Liberty and Property. Contrast this with
the nonsense that everyone should have equal shares la Karl Marx, From each according to
his ability, to each according to his need, and Stalins re-write, From each according to his
ability, to each according to his work!
Gwartney & Stroup point out the fact that political rules and policies affect the economy largely as a
result of the law of unintended consequences. Decisions are made and policies implemented with utter disregard
to potential future outcomes, which have probabilities that must be estimated and the consequences calculated.
Consider their admonition:
we are a nation of economic illiterates. In a democratic setting, the consequences of economic
illiteracy can be disastrous. People who do not understand the sources of economic prosperity are
susceptible to schemes that conflict with the attainment of that prosperity. (v)
(TANSTAAFL)! They can always raise taxes, impose user-fees, impose price-controls, and, thereby, distort
markets, i.e., divert spending on PRIVATE sector goods and channel it into the production of PUBLIC
sector goods. This does not reflect the desires of consumers, but the wishes of special interest groups, i.e.,
it represents rent-seeking behavior. (go to: www.dallasfed.org/research/ei/ei0302 ) Such costs are a
critical force in directing scarce resources to their highest and best uses and avoiding mal-investment!
See: Robert L. Formaini. 1999. Hayek Social Theorist of the Century, Economic Insight, 4 (1); also
available at: www.dallasfed.org/research/ei/ei9901;
Mises ei; Roger W. Garrison.2001. Time and
Money: The Macroeconomics of Capital Structure. London: Routledge/Taylor & Francis Group, esp.
Chapter 3; Ludwig von Mises, 1998. Human Action: A Treatise on Economics. Auburn, AL: Ludwig von
Mises Institue, esp. Chapter XX.
Prices provide signals to both consumers and producers: higher prices buy less and produce more; and
lower prices buy more and produce less [revealed in the demand/supply relationship]. In this process,
increased consumer demand for a good, stimulates producers to attempt to increase output. Output
expansion requires producers to bid resources away from their use in the production of other goods (their
alternative uses). It is always necessary to remember Mises admonition: in a free market, the consumer is
king and that all production is for consumption! Note the emphasis that Gwartney & Stroup place on the
provision of so-called free goods to an individual or group and the opportunity costs that these free
goods impose on others. (7) They are emphatic in their assessment:
this merely shifts the costs; it does not reduce them. Politicians often speak of free
education, free medical care, or free housing. The terminology is deceptive. None
of these things are free.
Something to ponder, the Bush II administrations proposed Medicare Prescription Drug Bill, what are the
likely opportunity costs? And, what are the potential unintended consequences? In spite of many
government attempts, none have been able to repeal the Law of Scarcity. However, its restrictive nature
has been loosened over the long haul by the activities of the innovative actions of the entrepreneur. See:
W. Michael Cox. 2001. Schumpeter In His Own Words, Economic Insights, Vol. 6, No. 3; available at:
www.dallasfed.org/htm/pubs/ei/ei6_3_01. For example, as demand for copper has grown and prices have
risen, it has been displaced in many uses by cheaper and more efficient substitutes, i.e., optical fiber
and/or aluminum cable. Other examples include the longer term shift in energy sources: wood, coal, liquid
fuel stock, gaseous fuels, to WHAT next?
Library
Assignments:
Written
Communication
Requirements:
Oral
Communication
Requirements:
Computer
Applications:
Use of the Internet for data searches, articles from scholarly journals
and data manipulation are encouraged. The need for students to access the
instructor=s home page to download syllabi, class materials, and project
instructions serves as an additional set of computer applications.
International
Coverage:
Environmental
Issues Covered:
Ethical Issues
Covered:
Ethical issues related to illegal or immoral activity within the economy will
be discussed where and as appropriate. This is particularly appropriate,
given recent scandalsEnron, Global Crossing, etc. and elected
governmental officials. Since the course addresses aggregates, aggregate
behavior of producers, consumers, regulators will be considered.
Academic Integrity: Each student is expected to do his/her own work on assigned activities and
on all quizzes. An understanding of what constitutes plagiarism and abuse
of copyright >fair use= laws is expected of each student.
Students With
Disabilities: