Changes

{{Economics_Lectures}}

{{Economics_Lectures}}

One miracle is mentioned in all four Gospels: the multiplication of the loaves and fish to feed the crowd of thousands.  It illustrates God easily '''''overcoming''''' a scarcity in food.  Problems of scarcity seem to worsen in an absence of God.  The devout Puritans overcame scarcity in the cold New England winters, and created wealth under harsh conditions.

One miracle is mentioned in all four Gospels of the Bible: the multiplication of the loaves and fish by Jesus to feed the crowd of thousands.  It illustrates God easily '''''overcoming''''' a scarcity in food.  Similarly, the devout Puritans overcame scarcity and created wealth under harsh in New England in the 1600s.  Scarcity is a bigger problem in the absence of God.

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?

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?

== What Supply and Demand Are '''''Not''''' ==

== What Supply and Demand Are '''''Not''''' ==

In learning what something '''''is''''', it sometimes helps to learn what it is '''''not'''''.  Put another way, listing what is irrelevant to an important concept can help illuminate what that concept really means.

In learning what something '''''is''''', it sometimes helps to learn what it is '''''not'''''.

The preference of any single individual, such as yourself, is nearly irrelvant to the public supply and demand.  You may dislike the Yankees, but your own view is less than a "drop in the bucket" compared to the view of the public.  Similarly, the opinion of the wealthiest person in the world does not affect supply and demand any more than the opinion of the poorest person can, in a free market.  Wealthy people may avoid Wal-Mart, but that did not keep it from becoming the richest and most successful store in the world.  '''''Supply and demand transcend and are above the views, preferences, and buying habits of any individual or small group of people.'''''  Supply and demand are like a massive ocean that's not going to change based on what a few people do.

The preference of any single individual, such as yourself, is nearly irrelevant to the overall supply and demand.  You may dislike the Yankees, but your own view is less than a "drop in the bucket" compared to the view of the public.  Similarly, the opinion of the wealthiest person in the world does not affect supply and demand any more than the opinion of the poorest person can, in a free market.  Wealthy people may avoid Wal-Mart, but that did not keep it from becoming the richest and most successful store in the world.  '''''Supply and demand transcend and are above the views, preferences, and buying habits of any individual or small group of people.'''''  Supply and demand are like a massive ocean that's not going to change based on what a few people do.

Note also that supply and demand do not care who a person is or what his background may be.  The store owner sells a chocolate candy bar for the same price to the richest man in the world as to the poorest man in the world.  The President pays the same price as the most disliked person in town.  Supply and demand, and the free market, treat everyone fairly and equally.  Supply and demand do not care about someone's status in society.  The free market is independent and above prejudice.  A restaurant owner is just as happy to serve, and makes the same amount of money from, the most disliked person in society as the owner makes from the most popular person in society.

Notice also that the free market treats everyone fairly and equally.  Supply and demand do not care about someone's status in society.  The free market is independent and above prejudice.  A restaurant owner makes the same amount of money from the most disliked person in society as from the most popular person in town.

It is worth noting other irrelevancies to the free market.  The "market price" set by supply and demand is often unrelated to the historical cost of the good.  Someone may have paid $300,000 for his house in 2006, when houses were high in value, but the market price for that same house in 2009 may be only $200,000.  When that person tries to sell his house in 2009 it does not matter what he paid for it in 2006.  All that matters is what the supply and demand for that house is at the time he tries to sell it.

Notice this too: the "market price" set by supply and demand is often unrelated to the historical cost of the good.  Someone may have paid $300,000 for his house in 2006, when houses were high in value, but the market price for that same house in 2009 may be only $200,000.  When that person tries to sell his house in 2009 it does not matter what he paid for it in 2006.  All that matters is what the supply and demand for that house is at the time he tries to sell it.

The free market and supply and demand are similar to a sports competition.  It really doesn't matter how many trophies one team may have won in prior years, or who likes which side better, or who thinks which side should win.  All that matters is which team is better on game day.  Likewise, all that matters to setting the price in a free market is the supply and demand at the time of sale.  In some ways that might seem harsh if it causes someone to lose money, just as it can be sad when someone trains extremely hard to win a match, but is defeated in an upset by someone nobody likes.  But in other ways this is fair, because it gives full opportunity for someone to do well no matter who he is and no matter where he comes from.  As long as the seller obtains the free market price, he does not care who the buyer is.

The free market and supply and demand are similar to a sports competition.  It really doesn't matter how many trophies one team may have won in prior years, or who likes which side better, or who thinks which side should win.  All that matters is which team is better on game day.  Likewise, all that matters to setting the price in a free market is the supply and demand at the time of sale.  That may seem harsh if it causes someone to lose money, just as it can be sad when someone trains extremely hard to win a match, but is defeated in an upset by someone nobody likes.  But in other ways this is fair, because it gives full opportunity for someone to do well no matter who he is and no matter where he comes from.

==Equilibrium==

==Equilibrium==