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| | A smart economist might observe that Shakespeare was expressing the undesirability of transaction costs nearly 200 years before Adam Smith discovered the invisible hand, and over 350 years before Ronald Coase discovered and criticized transaction costs. Shakespeare knew economics before it was even recognized as a field of study!<ref>Believe it or not, lawyers claim that Shakespeare was actually ''complimenting'' them, because the line was spoken by an enemy of freedom. See http://www.johnlocke.org/news_columns/display_story.html?id=962</ref> | | A smart economist might observe that Shakespeare was expressing the undesirability of transaction costs nearly 200 years before Adam Smith discovered the invisible hand, and over 350 years before Ronald Coase discovered and criticized transaction costs. Shakespeare knew economics before it was even recognized as a field of study!<ref>Believe it or not, lawyers claim that Shakespeare was actually ''complimenting'' them, because the line was spoken by an enemy of freedom. See http://www.johnlocke.org/news_columns/display_story.html?id=962</ref> |
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| | <parsing time> | | <parsing time> |
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| − | <humor and economics>
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| | <the politics of economics, and dependency; "give a person a fish, and feed him for a meal; teach him to fish, and feed him for a lifetime!"; how dependency affects political views> | | <the politics of economics, and dependency; "give a person a fish, and feed him for a meal; teach him to fish, and feed him for a lifetime!"; how dependency affects political views> |
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| | <economics of elections; interesting expense-per-vote statistic> | | <economics of elections; interesting expense-per-vote statistic> |
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| | + | <output and parable of talents; antitrust laws against limiting output; |
| | + | The vice of limiting supply (from question 7 on last homework; consumer surplus)> |
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| | <incorporate from an earlier lecture> | | <incorporate from an earlier lecture> |
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| | Today we are going to focus on the “long run.” | | Today we are going to focus on the “long run.” |
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| − | From prior lecture:
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| | == Introduction to Short and Long Run == | | == Introduction to Short and Long Run == |
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| − | Last lecture we focused solely on “demand”. This time we turn to “supply”. We look at how companies decide how much product to make and put out into the market. How many goods should a company produce, or how many services should it provide?
| + | In our last Lecture we focused on “demand”. This time we turn to “supply”. We look at how companies decide how much product to make and put out into the market. How many goods should a company produce, or how many services should it provide? |
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| − | The vice of limiting supply (from question 7 on last homework; consumer surplus)
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| | Before we start, however, we define two terms essential to economics: the “short run” and the “long run.” As its name implies, the “short run” is a relatively short period of time in which a company can only make temporary changes to its operation. In a sporting contest, the “short run” would during a game, when the coach decides to substitute his players or alter the game plan to try to win that particular contest. During the “short run” only quick and temporary reactions by a company or firm to a fluctuation in demand are possible. For example, changes like using more overtime labor would be a short run adjustment. Or telling workers to take an extended vacation due to lack of demand for the goods would be another short run change. This class we will be focusing on the “short run.” | | Before we start, however, we define two terms essential to economics: the “short run” and the “long run.” As its name implies, the “short run” is a relatively short period of time in which a company can only make temporary changes to its operation. In a sporting contest, the “short run” would during a game, when the coach decides to substitute his players or alter the game plan to try to win that particular contest. During the “short run” only quick and temporary reactions by a company or firm to a fluctuation in demand are possible. For example, changes like using more overtime labor would be a short run adjustment. Or telling workers to take an extended vacation due to lack of demand for the goods would be another short run change. This class we will be focusing on the “short run.” |