Chapter 6

Chapter 6 starts off with how government policies on price can affect on market outcomes. Government policies can establish price ceilings and price floors, price maximums and price minimums respectively. If the equilibrium prices do not cross the boundaries everything is fine but once they do shortages and surpluses can occur. Surpluses happen with price ceilings and shortages happen with price floors. Next the book tackles taxes. When a good or service is taxed  the tax does not fall on the buyers or the seller, it falls on both. This is called the burden of tax and the way it is  spread is called the tax incidence. The way the tax is divided depends on how the supply and demand graphs look and their elasticity. I would give this chapter a 1 out of 3. I feel price floors and ceilings are easy to understand and so are taxes and their divisions among the buyers and sellers. However I do no exactly know how to calculate the actual division of the tax.

Crisis Actors and a Reighstag Fire

Everyday we encounter thousands of messages from  other humans and we have the self awareness to resist if we want, however we will go along with the message if we along with other people see it at the smart move. There are also people with no self awareness  who will take the message as fact immediately and can get played by the person sending out the message. It is important not to be this type of person. I definitely agree with the view presented that you must think for yourself. If you just believe everything  that is said to you and take it to heart it is easy for people to take advantage of you. By taking advantage of you they can destroy your livelihood. Nowadays it is very easy to be exposed to these malicious messages with the expansion of social media and the internet and it is important to be at least a little skeptical so you don't get played. For example now there are tons of sketchy websites on the internet that will try to steal your credit card information. Some people won't even think twice and just type away their credential. Next thing they now there missing all their money. Most people would look at the website and ask themselves is putting my info in their really necessary. However its not just these small time internet scammers we have to watch out for. We also have to take with a grain of salt what the big companies and big people have to say because they might not have the best intents for us people.

Chapter 5

I would say Chapter 5 had a difficulty rating of 2.5 for me. Chapter 5 was all about elasticity of supply and demand. Elasticity is how supply or demand respond to a change in price. If there is a large response to price it is elastic. If there is a small response to price it is inelastic. I will definitely have to reread the chapter the grasp of a further understanding. I understood the basic definition of elasticity, however I feel elasticity was easier to understand when it was on a graph. As soon as they take away the graphs and start talking about elasticity I become a bit lost. I understood the equations and how they related to the graphs, but again once the graphs were gone it became confusing. Also I had some trouble understanding how elastic changes on a demand or supply curve and how it doesn't stay constant.

Chapter 4 blog

Chapter 4 is mostly about supply and demand and how the two are connected. Early in the chapter Mankiw brings up the correlation between prices and demand. As prices go up people want to buy less since the goods are more expensive and as the prices go down people want to buy more since the goods are less expensive. This is called the Law of demand. This law of demand can be graphed to create a demand curve which is sloped downwards. The demand curve can shift depending on many variables such as prices of related goods and peoples tastes. After bringing up the correlation between prices and demand Mankiw brings up the correlation between prices and supply. The law of supply is that the higher the prices are the more profitable something is so the supply is higher. The lower the prices are the less profitable something is so supply is lower. This's can also be graphed into a supply curve which slopes upward. The supply curve can shift from variables such as innovations in technology and future expectations of prices. The demand curve and supply curve can both be put on a graph and where they meet is the market equilibrium. At this point the quantity of the good that buyers are willing and able to buy exactly balances the quantity that sellers are willing and able to sell. I would give this chapter a 2/3. The beginning is easy to understand, but as we move on to equilibrium and movements of the equilibrium it gets confusing. I also have a question on the law of supply. If something is less profitable wouldn't the firm want to increase the supply so more can be sold and make something profitable again?