Chapter 6

The chapter opens up with the concept of price floors and ceilings, adding on to the previous 2 chapters' main concepts. A price ceiling is the maximum price that a good can be sold by the sellers for. A price floor is the minimum price that a seller can sell a good for. Both of these are government instituted policies, binding the markets to follow them. For example, if you take the hot dog industry, you could apply these policies to see their affects. If a price ceiling is set at $4, then the market can no longer raise it past that price. If a price floor is set at $2, then the market cannot sell below that amount. Whether or not the price floor and ceiling are binding depends on where the equilibrium is. If it is above the price ceiling or floor, then its binding, but if its below the equilibrium it is not binding. I thought it was interesting to see how an equilibrium price must change if the equilibrium was binded by the price ceiling or floor. It was also interesting to see how it affected supply and demand, each being affected differently based on whether its a price floor or ceiling, and where it is in relation to the equilibrium. If the price ceiling is lower than the equilibrium there will be a shortage, while if the price floor is above the equilibrium there will be a surplus. Another important part was on the mechanics of distribution and how different changes in the price floor and ceiling affect these methods.

Article Review

Hunt's article focuses on self-awareness and independence from others. He argues that the media and the government both use crisis actors and crisis management to control you.For example, the media chooses what to report on, what view to report from, how they shine the light on a subject, and how accurate their statistic are. If one only uses one news source, that source decided what he or she hears about and why it is a good or bad thing. In other words people are unable to make the decision for themselves if they rely on only one source, they have the decision made for them. This adds on to Hunt's comments on how persuasion works. For example, a presidential nominee may have different views from the majority of the public, but they will lie and tell them what they want to hear. At this point the nominee is not informing, he or she is persuading. And people fall for it all of the time. A race for a position is not so much on whether the person is good or not, its about how good they can lie and tell the audience what they want to hear.

Hunt argues that people are played all of the time, which is accurate. If people are told something, they more often than not will believe it without question. For example, if Aaron was to go online and find what the wage gap was between a woman and man, he would likely look at one or 2 sources tops on the first page of google. He would find his "answer" and considering its a "statistic," he will not question where it came from or how it was calculated. Now he is someone who has been played. If he spent an extra minute researching how the wage gap statistic was derived instead of taking it for how others say it is, he would know that the number is completely unreliable and vague. However, people tend to take information way too easily, making themselves gullible. They become the sheep, not the Shepard.

Chapter 5

Chapter 5 is a continuation and add on to chapter 4's supply and demand mechanics and concepts. It focuses mainly on elasticity, which is how the quantity of supply or the quantity of demand is affected based on the responses of consumers and sellers. It then talks about inelasticity and elasticity. An example of an an inelastic good is salt. If the price is increased, the demand would be largely unchanged as very few people buy it frequently. However, if the price of an elastic good like kit-kat were to increase, many people may switch to another type of chocolate. One question I had is for unit elastic products, how does it not effect total revenue since the price is changing? Total revenue is the amount paid by consumers and the amount received by sellers. Why is supply more elastic in long run than short run? Is it because that responses from buyers and sellers is usually only temporary until the good recovers back to equilibrium? The reason why some goods like water are inelastic is because they are very important and people are willing to pay a lot as its a need for survival. The cross price elasticity of demand shows how much the amount demanded changes based on the change in price of another good. After reading the chapter, although they were through with their general  descriptions, I think there could have been more quick/small examples to explain some of the concepts rather than having huge ones at the end after all of the reading.

Chapter 4 Blog

Gabriel Feldman
Period 2

Chapter 4 is centered around supply and demand. If the price goes up, demand goes down and vice versa. Like if the price for computers increased significantly, less people would by them in an order to save money. In supply, price and supply  have a positive correlation, both increasing and decreasing together. If prices go up, demand goes down, and the sellers are left with a surplus of goods due to the lack of consumers buying their products. People naturally want to get more for less, i.e. have a lower opportunity cost. It was interesting reading about how society's decisions have so much power in markets. For example, if society thought it best, they could drive a huge company like Microsoft into the ground very easily.
The concept and mechanics of equilibrium were intriguing, such as how a market naturally drifts towards equilibrium. Also how someone can figure out the state of a market by looking at where the market price is related to the equilibrium. Surplus occurs when the market price is above the equilibrium and a shortage occurs when the market price is below equilibrium. What surprised me however were competitive markets. The fact that in a competitive market, a seller could drastically change his price and not have any influence in the market. Although, if they lowered the price enough and for a long enough period for time, couldn't they undercut and drive out at least their nearby competition? In which they could have a sizable affect on the market. Through this they could create a monopoly correct?