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{{Economics_Lectures}}

{{Economics_Lectures}}

Only one miracle during Jesus's ministry is mentioned ''in all four Gospels'', and it is referenced even twice in Mark.  It is the miracle of the multiplication of the loaves and fish to feed the crowd of thousands.  It illustrates God easily '''''overcoming''''' the scarcity in food.  Think about it: does scarcity really exist, or is it the result of turning away from God?  Scarcity seems to be exaggerated the further away a society is from God.  The devout Puritans thrived with nothing in the cold New England winters.

Only one miracle during Jesus's ministry is mentioned ''in all four Gospels'', and it is referenced even twice in Mark.  It is the miracle of the multiplication of the loaves and fish to feed the crowd of thousands.  It illustrates God easily '''''overcoming''''' the scarcity in food.  Think about it: does scarcity really exist, or is it the result of turning away from God?  The more a society turns away from God, the bigger the problem of scarcity.  The devout Puritans starting with nothing in the cold New England winters, but created everything they needed.

As a student astutely suggested last class, economics is the study of the '''''transfer''''' of goods and services.  The first obvious question is this: what determines the '''''price''''' and '''''quantity''''' of goods transferred?  In other words, how much must a buyer pay for the good (the price), and how many units of the good (the quantity) will the seller be able to sell at that price?

Economics is the study of the '''''transfer''''' of goods and services.  What determines the '''''price''''' and '''''quantity''''' of goods transferred?  How much must a buyer pay for the good (the price), and how many units of the good (the quantity) will the seller be able to sell at that price?

Let's take an example.  Suppose you '''''own''''' a candy store, and you sell chocolate candy bars.  What price should you use for those candy bars?  If you sell them for $1 each, many people will buy them.  But if you charge $5 per candy bar, fewer will buy them at that price.  Your quantity of goods sold will be much less.  If, on the other hand, you sell the candy bars for only 10 cents per bar, you'll sell out quickly as people rush to buy the bars at that low price (perhaps to resell the bars at a higher price and make a profit themselves).  It might seem like you'd be happy at selling so many, but you make much less money overall at 10 cents per bar than at $1 per bar.  As the candy store owner you're worse off if you set the price at only 10 cents per bar, because you receive too little for each bar, and you're worse off if you set the price at $5 per bar, because you sell too few bars.  The best price for you to use for the candy bars is around $1 per bar.

Let's take an example.  Suppose you '''''own''''' a candy store, and you sell chocolate candy bars.  What price should you use to sell those candy bars?  If you sell them for $1 each, many people will buy them.  But if you charge $5 per candy bar, fewer will buy them at that price.  Your quantity of goods sold will be much less.  If, on the other hand, you sell the candy bars for only 10 cents per bar, you'll sell out quickly as people rush to buy the bars at that low price.  It might seem like you'd be happy at selling so many, but you make much less money overall at 10 cents per bar than at $1 per bar.  As the candy store owner you're worse off if you set the price at only 10 cents per bar, because you receive too little for each bar, and you're worse off if you set the price at $5 per bar, because you sell too few bars.  The best price for you to use for the candy bars is probably around $1 per bar.

The above analysis applies to the sale of a good (a candy bar), and the same analysis applies to the sale of services (such as a car mechanic selling his car repair services).  People sell their time as much as they sell what they own.  In this sense, "'''''time is money'''''" because time can be converted into money by spending that time working.  You could convert 8 hours of time into about $60 by working at McDonalds, for example.

The above example is the sale of a good (a candy bar).  The same analysis applies to the sale of services (such as a car mechanic repairing cars).  People sell their time as much as they sell what they own.  In this sense, "'''''time is money'''''" because time can be converted into money by spending that time working.  You could convert 8 hours of time into about $60 by working at McDonalds, for example.

We could spend the remainder of this course on pricing goods and services.  Millions of businesses succeed or fail based on how they price their goods or services.  Thousands of transactions affect the pricing of a good or service, so this question is not as simple as it looks.  Assumptions have to be made in order to draw conclusions.  In some cases, price behavior baffles even the greatest experts in the field.

We could spend the remainder of this course on pricing goods and services.  Millions of businesses succeed or fail based on how they price their goods or services.  Price fluctuations, such as the repeated increase in gas prices, can surprise even experts in economics.  But amid all that is not understood, there are some simple truths that can be learned.

== Price of Stocks ==

== Price of Stocks ==