Boudreaux first Lecture
Boudreaux first Lecture econ 103-004
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This 4 page Class Notes was uploaded by Wesley Hunt on Friday September 4, 2015. The Class Notes belongs to econ 103-004 at George Mason University taught by Donald Boudreaux in Fall 2015. Since its upload, it has received 129 views. For similar materials see Microeconomic Principles in Economcs at George Mason University.
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Date Created: 09/04/15
Week 1 This is not a business course If Boudreaux knew how to predict stock market he d be a billionaire It s about How society hangs together what an amazing world this is This world is full of constantsDon t take it for granted Material standard of living is envy of the world Economic historyCurrent terms A typical person since the dawn of time lived on 3 a day Only within the last 300 years the average cost became 51 a day Living standards higher materially than majority of people in history Life before the Industrial Age was materially very miserable What happened to spearhead Industrial Revolution Theorizing what happenedWhat could have happened If good try to make it happen again and explore ways to spread lf bad we can prevent it from happening again Economics is a set of theories to ponder this question Theory is a fancy term for a story A Bad theory is an unconvincing one even to oneself The fact is the material boom in wealth Theory explains it One theory Simply nobody cared about the wealth disparity Then people got sick of everyone dying so they tried to make more money Another theory The plague killed half the populace then in 200 years it rebuilt Did wealth increase DESPITE population or did population HELP spread the wealth In 200 years humans became less averse to sex HIGHLY UNLIKELY More babies just that they all died Agricultural yield and healthcare improved and extended lifespan Wealth rose not because of that boom but because of greater resources Why did the resource pool suddenly grow Even if you disagree with this explosion you got to understand why it happened to stop it Once we understand that we can now evaluate more mundane policies Economics helps you evaluate several arguments Economics is a science It is an objective use of reason and evidence in search of understanding Search for truth and understanding without controlled experiments Soft science How is wealth produced Humans work we provide our bodies and carry food everywhere We use our minds and bodies to provide goods and services Raw materialsNeed use of these raw materials Wealth is taking raw materials and making them into consumable materials People worried each of us had such high standards of living Are we depleting our sources There could be a day of reckoning if we do BIG TAKEAWAY POINT Production is taking raw materialsusing process and thought to extract just the right resources into just the right products The way in which we took the materials and fashioned them into more efficient output than before How The Pencil AllegoryEvery professor gives this sooner or later Pencils are made out of many materials and they all have to come together to make a plain ordinary pencil Part of stock and value of resources pencils not high on the totem pole of values No one ever knows or can possibly know how to make a pencil One would have to Find a cedar tree Make just the right shape Then find iron ore Mold that into shape Adz the bark of the tree into form Round the hole in the center perfectly Search for graphite in the mines of Mississippi Mix it with the exact right kind of clay Make bauxite into aluminum Find rubber for the eraserrubber trees directly in the rainforest in ideal spot Find transport to get everywhere Grind the paint and make it solikely drill and refine oil Make the paint exactly the right color Just to make one simple pencil One simple pencil is the knowledge of billions of people in collaboration Someone knows how to do one of these things so one person does not have to and none of them know you and they re not getting money from it The same principles apply for everything else Everything we consume in modern society is a collaborative effort Somehow everything comes togetherjust so to produce something at a decent price Before this they either made it upfront or knew someone who could
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