Topic 17: Tragedy of the Commons Experiment

No one in our table take too many fish, because it is simply too hard to 'get' fish. Each person only gets two to three fish. Everyone did tried to take as many as possible, but it is not easy to do so. Only I sacrifice the number of fish I took for the good of the community, because I done this kind of exercise before. The society neither reward person who sacrifice nor person who gain the most benefit, because everyone want to gain the most profit and they don't care about other people. Our strategy change in game 2. We decide to only take two fish on each round and take all on the last round. It does make a difference to know what the rewards are. It is not possible to maximize fish caught per person as well as the number of fish remaining in the pond at the same time, because to maximize fish per person is to make sure the lake is empty. A local area such as sofa area has situation arises. Everyone want to sit on the sofa after lunch, but there are not enough sits for everyone. The problem can be solved through sharing the sits and take turns. Oil and coil are natural resources that are common resources. Global commons are outer space and ocean. Outer space and ocean are not being used wisely because they are not being used completely and efficiently. Our knowledge to those area is small. Not all the resources within the ocean or outer space are being used wisely. People can research more on how to use resources completely.

Topic 16: Game Theory and Chicken

Game theory assumes that people make rational decisions. I think this assumption is valid because no matter what you will make the decision that benefit you the most, even you know other one is going to choose to silence, you will want to be free and choose to confess other people's crime. If you know the other one is going to confess, you still confess too to 
I think the bad outcome might not be always inevitable because after thinking though people maybe able to cooperate and trust each other on the issue. For example: If everyone choose to chase other girls instead of the blond, everyone gets a girl. Although they didn't maximized their self-interest, but they are getting result they would have get. The better outcome that Nash says in the video is that all guys don't chase that blond instead they chase four other girls, so that they won't get in each other's way and they don't insult the other girls. If they all go for the blond, blond will reject them and rest of the girl will reject them too. Adam Smith's invisible hands won't work if the situation is prisoner's dilemma.

Topic 15: What is a Monopoly

The three main characteristics that make a firm a monopoly are only one seller, producing an unique product, and having barrier to entry. The quantity a firm produced is at where the marginal cost and the marginal revenue intersect. The price of the output will be the demand at that same quantity. The costs of the monopolist are just the costs of the production and the benefit of the monopolist are the profit earned from every output they sell. The costs to the society is the consumer surplus that is lost in the monopoly market. One commentator mentions that one of the problem with monopoly is that it transfer income away from consumer to themselves, but economists are not concerned with this. Economists are concerned about inefficiency. Economists encourage monopoly that developed from efficiency.  I agree with there concerned. An efficient firm is very important. It uses its resources to produce most of it. Monopoly can be good in a sense that if average cost is decreasing output, then large scale manufacture in production. I think it is not worth a try to attain a monopoly, because although monopoly is very inefficient. The surpluses are not maximized and deadweight loss occur.

Topic 14: Productivity Experiment

In this experiment, we are testing the efficiency of the production as the number of workers increase. I am a worker in this experiment. The production went well when it got closer to the end. Problems came up when too many workers are doing the same job, when there are not enough capitols, and when people are not specializing.The production didn't go the way I expected, because the production is really random. The number of the production goes up and down, no matter how many worker increased. I think this happen is because the limited capitols and each worker's efficiency. Sometime people slack off a bit, and sometime it is the lack of capitols that cause the production goes bad. This result is pretty surprising because I didn't expect it goes up and down. I thought the graph would be like what the textbook described. The production goes up as the worker increase and when it reach a certain point. It falls back down. I think the company could do for the short-run is company should tie the company's wealth to the worker in order to encourage the workers to work harder, or the boss can make the entire production line more organized. For the long-run, company should increase the capitols, so more people can do other jobs, instead of everyone crazily doing one job.

Topic 13: The Return of the Zeppelin

Determinants of demand are the prices of related goods, expected future prices, income, expected future income, population, and preferences. Determinants of supply are the price of factors of production, the prices of related goods produced, expected future prices, and technology. The determinants that apply to the success of Zeppelin and to Airship Ventures are technology, preference, and expected future price. Bank investment is one of the determinants of success of Zeppelin. If no one invest, the cost will be very great! Technology has totally change the return of Zeppelin. They change the gas in Zeppelin from hydrogen to hellion, so the Zeppelin won't explode when it react with oxygen. Also, the technology make the experience better by reducing the noise and the machine. Airship Ventures is an oligopoly, only three airship company own a Zeppelin and only one in the United States. Three determinants of demand for the success of Airship Ventures are preference, expected future prices, and the prices of related goods. People's preference decrease when the Zeppelin exploded years ago, and decrease the demand for it. The prices of related goods also affect the success.  If a hot air balloon can do the same thing but cheaper, then people will tend to go with hot air ballon. I think airship travel is not a good idea. Only when the price of the Zeppelin is lower than the related goods, I will consider it.

Topic 12: Pizza for Pesos?

The idea of utility is illustrated in the video. The utility of the consumer increase when they are able to pay a pizza with Pesos instead of U.S. dollar. Because the pizza can be paid for pesos, the consumer preference for that pizza patron has increase. They prefer to pay it with Pesos rather than U.S. dollar. I think there will be a big change if the exchange rate between Mexican Pesos and U.S. Dollars raises or fall. If the exchange rate between U.S. dollar and Mexican Pesos fall, then more Hispanic costumers will come here and spent more money. If the exchange rate between U.S. dollar and Mexican Pesos raises, then less consumers will use Pesos to buy pizzas. I think the argument against accepting Pesos is half right and half wrong. Accepting Pesos can increase the consumer spending which help the economy of U.S., but at the same time, Mexican can cross the border with not too much worry, because they can buy food at Pizza Patron and exchange money at Pizza Patron. The exchange of money is also a kind of international trade. Using Pesos to exchange for pizza or U.S. dollar can be regard as international trade.

Topic 11: Brand Names and Utility

Brand names have a huge effect on the utility that a person receive when consuming goods or services. People generally think that goods or services with brand names are better than those with no brand names. To me, it really depends on the product we are looking at. For foods and drinks, my demand curve for brand names and no-name are usually very close, because foods and drinks usually have not much difference on taste or quality, at least I cannot tell the difference. For example: Coke and Pepsi. Coke and Pepsi taste the same to me, so I would only buy the cheaper one. For electronic devices, I would prefer products with brand names more than no-name, because electronic product is a long-term used item. I want to make sure that it won't break that easily because electronics are usually expensive. For example: a random earphone and Beats. I would rather buy Beats because I can trust the quality of Beats, but not the random earphone. If all things being equal, such as quality and durability, I think a product having a brand name will not bring me more utility, because in this case, a cheaper product will bring me more utility than brand name.