Entry 17, Tragedy of the Commons Experiment

During the experiment, we had some ideas to start off with which certainly made the experiment more different. We had the idea of conserving the fish, so they can mass produce later on while we only acquire the bare minimum to survive. People did not take too many fish and like I previously stated, Andy quite possibly disrupted the outcome that we originally wanted, but we gained the most in the end. Society does reward those who take the most in the short run, as they can sell the most and become rich and prosperous among the fishing industry. We all did sacrifice for the good of the community as we thought that it would be a good idea to conserve now and gain alot later. Society does reward people like that after as afterwards our fish kept reproducing and all we could do at the end was keep fishing but we couldn't even finish our plate due to the large number of fish that have repopulated. Strategy stayed the same for game two as we were completely prosperous from our first round and we continued to do the same. There were no differences other than the fact that we started to clip more fish as we were scared that we couldn't finish at the last round. There is no way you can maximize both the fishermen's fish and the fish in the pond, if one goes up, the other has to go down. If the fishermen were greedy, the fish in the pond would in response, be less. We are faced with many commons, things like the sofa area will be taken up by many people. Natural resources that are common resources are such things like coal, natural gas, fish stock. Global commons are things like the ocean, the atmosphere and more. Many are not being used to its maximum power as shown in the experiment that the society will actually benefit more if the common resource were not taken up and people were not in pursue of personal interest. 

Entry 16 Game Theory and Chicken

  I believe that people make decisions base on their self interest. This is a hands down no questions asked assumption, just from daily living, you can tell people act on self interest and so sometimes acting in self interest is not always a rational choice. Rational choices are the ones that are compared with cost and benefits and taking the one that has the most benefit with the least cost to be executed, however sometimes people don't always make the most rational choice for the society, but chooses the one that is the most benefit for themselves. I think that the bad outcome is always inevitable, as people will and always WILL act on self interest. Whoever would act on someone else's interest would be a saint. I think it could happen sometimes, if the loyalty shared between two people are so great that they would be willing to give up their own self interest for the other individual. When no one confesses is the best outcome, but that is highly unachieveable considering everyone acts on their own self interest. If no one gets the girls, it is actually best for the society, if everyone just were not trying to get the single blonde one and went with the friend, it will be the best outcome for society, just like the prisoners dilemma where two people giving up not saying anything will be in the society's best interest rather than both confessing which is the bad outcome for the society.  I think personally I would do the same, of course self interest rises above of other people, why in anyone's right mind would you want to do something great for someone else while you lose some things. I believe that the society acts like this as a whole, therefore creating many bad outcomes. 

Entry 15: What is a Monopoly?

The three main characteristics of a monopoly would be that there is only one seller, a unique product and barriers to entry. Given the examples of the diamond industry, from companies such as Debeers, monopolies will set prices differently and have a different output than Perfect Competition. They will chose to set the number of diamonds where marginal cost equals marginal revenue and then charge the monopoly price at that point. Which at that point, will turn out to be the most money the monopoly can charge for that many diamonds. Many people believe that the consumers lose their surplus to the monopolies as it gets transferred in a monopolistic society, and with a higher price than a market with multiple firms, but actually the economists don't like is the lack of efficiency monopoly creates as certain monopolies aren't trying to maximize output, and therefore economists are trying to promote those monopolies in which the single seller will be more efficient than other people, as they are the most skilled, and the one that got there first. Monopolies can be good as if the average cost is decreasing in output, and there are advantages to large scale manufacturing and production, which is a monopoly, a one seller. Benefits of a monopoly includes innovation and research capabilities a monopoly can withstand, as they will have patents to protect their innovation and further more encourage more inventions, but they have the cost of having to be charged highly as there is only one seller in the market. I think it is not worth it to maintain a monopoly given that they have to spend their surplus earned from consumers on things such as more advertisements to pull in more consumers and therefore not receiving alot of surplus and will create an inefficiency in the market. 

Topic 14, Experiences Today

 Today, we made our own company, producing our own products with a manager as an overseer, an accountant counting all the stuff we created and of course, a quality control agent. I thought it demonstrated a very good job of the average cost curves and the marginal cost curves. As it shows that the jump between zero workers to one worker, or one worker to two worker is very great, as the capital is spread out through the workers evenly, and the workers are able to conduct the most efficient jobs out of the company. However, as more and more people begin to come in, as the assembly line begins to have higher demands in certain areas such as the stapling of our product, it puts pressure on people who are in charge of jobs with slightly more difficulty and needs slightly more time on such as the cutting of the paper itself. We then resorted in using many pieces of paper at once, which then turned out to be a disaster and everything became crooked and unusable because our quality control agent rejected all of them. I believe that the efficiency of the company is determined through the leader, once Jimmy started doing a better job in telling people what to do and what not to do, the company started to actually roll on, and producing more and more useful products. In the beginning  people were doing random jobs and the capital was all spread out which did not yield the maximum utility for the company, however towards the end, it became better and we begin to produce alot more products than the beginning.

Topic 13: The Return of the Zeppelin‏

  The return of the Zeppelin is caused by the change of tastes, income and possibly the amount of buyers. As the airship technology decreases, fewer and fewer suppliers are located within the country. People began to seek new ways of travel, new interesting, fascinating ways of traveling up high in the air but low enough to enjoy the view. Technologies have helped the return of Zeppelins, as the balloon is now filled with helium instead of hydrogen, less dangerous in many aspects in which secures the consumer's fear of the Hidenburg Accident occurring once more. The technology advancement has led to the success and prosperity of the newly released Zeppelin.  The type of market structure for the Zeppelin right now is probably a oligopoly world wide, but a monopoly in the United States market. It owns the only Zeppelin in the country therefore people all around the country would have to select their company unless they are willing to spend more money on going abroad and taking the airship. The companies for airships before, as in the 1940s, they probably was in an oligopoly market structure as everyone competed with each other when the airshiplines were popular. Change in all the things of tastes, income and amount of buyers can all make this market very successful  As people get tired of ordinary airliner, they would select a new, different way of travel, same as when their income rises, they would spend more money on activities they have never done before rather than continuing those that they have done already. At last, as the amount of buyers increase due to the first two determinants, the market will allow the company to expand and prosper in a country like the United States. I believe airship traveling is still dangerous, to be honest people may think that it could become those ordinary methods of travel, however i do not see it becoming ubiquitous as the amount of space it takes up is immense and the slow pacing of the ship can be the disadvantage of the airship travels. I would never take an airship, as it just seems absolutely dangerous to even be on.

Topic 12: Pizza for Pesos?‏

For this journal entry, watch the video "Pizza for Pesos" (watching this video has been assigned as ahomework assignment, so be sure to click on the "submit" button after you watch it so that you can get credit). After watching the video, comment on it in your journal. In your writing, consider the following questions:

• How does the story in the video relate to the idea of utility?
• How does it relate to the concept of consumer preference?
• What affect do you think a change in the exchange rate between Mexican Pesos and U.S. Dollars would have on Pizza Patrón's business? How would it affect the budget lines of its customers? (currently the exchange rate is 12.97 pesos to the dollar).
• What do you think about the arguments against accepting pesos? How are these arguments related to our previous discussions regarding international trade?

Don't forget to write at least 200 words (how could you write less about such an interesting topic?).

Sincerely,

  Pizza Patron is not accepting Mexican Pesos as there are 5% who desires to pay in Pesos. However this resulted in a wide debate about if this is a symbol of accepting immigration from Mexico. Utility is the benefit you get from receiving a certain amount of products, the utility of customers with the amount of Pesos in America is very little, as they cannot use Peso's in America, but after this rule has been implemented, the utility of Pesos has gone up as customers can now use Pesos to exchange for pizza. Everyone has their different preferences as we can illustrate on the preference curves, however by allowing customers to pay in Pesos, it has increased the possibility  of customers changing to Pizza Patron as they are more friendly of the currency of Pesos or just Mexicans in general. I believe that the impact is very great, as Pizza Patron allows immigrants to freely trade their left over money for some pizzas and exchange for change in US dollars. I believe that the exchange rate could cause Pizza Patron to earn more money or lose money depending on the economic situations and the currency rate of the money at the time. At certain times, if the Pesos are good enough, then they should be able to earn a little bit more money if the currency rate is set above their standard rate of exchange in the store and vice versa when it comes to lower exchange rate. I think it is good that Pizza Patron is allowing Pesos to run freely through their store, as this can help the people to exchange their currency without having to go to a bank where foreign money is taken to be exchanged. However, many people thinks that this is supporting the fact that these illegal immigrants coming into our nation, and this is relating to international trade as people don't want to outsource as much and are more patriotic towards their nation. 

  

Topic 11: Brand Names and Utility‏

   People always chase after the brand name, everyone always with or without conciously chase after the well know international brand. In the video, Aldi's sells many cheap no name products that tastes and has the completely same quality as the international ones, and they are saving up to 50% less than what they can buy at places like Wal-Mart. When buying a branded product, the demand curve shifts to the right as more demanders for it due to the popularity of the brand, no name products will be always on the left side of the popular brands due to its lack of advertisement and popularity among the people. To be honest, I believe that branded stuff does bring more utility, because it is just in our mind subconsciously to think that the well known brand is better tasting or better in quality because it is more well known. I believe that in my cases it would be things like Oreo cookies. Oreo cookies are very well known throughout the world and has many other brands that provides chocolate flavored crackers with cream in the middle, however I believe that many people still finds Oreos more attractive in terms of size, quality and taste. Many people will probably think Oreos are the pioneers of the chocolate cookies, where they could actually not be, they could have just been simply better at marketing strategies to bring these sandwich cookies to a global scale.  Over all, I believe that branded things will still be more attractive to buyers due to its popularity and people's overall trust within the brand itself.