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ECON 101: PRINCIPLES OF MICROECONOMICS

ECON 101: PRINCIPLES OF MICROECONOMICS. Professor David Harrington . Office: Ascension Hall 309. Office hours Wed. & Sun. 1:00-3:00 pm. Microeconomics. The study of the forces that determine the composition, allocation, and methods of producing society’s output. Who gets it?.

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ECON 101: PRINCIPLES OF MICROECONOMICS

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  1. ECON 101: PRINCIPLES OF MICROECONOMICS Professor David Harrington Office: Ascension Hall 309 Office hours Wed. & Sun. 1:00-3:00 pm

  2. Microeconomics The study of the forces that determine the composition, allocation, and methods of producing society’s output Who gets it? What is produced? How is it produced?

  3. How do Societies arrive at answers to these questions? What “institutions” do they rely on? Market Price System

  4. Tuna auction at the Tsukiji (pronounced tsu-kee-jee) fish market

  5. How do Societies arrive at answers to these questions? What “institutions” do they rely on? Market Government Regulations Price System Taxes Spending Gov Enterprises Non-Gov Organizations (NGOs)

  6. What is Produced? Bottom Billion (BB) live on $2/day World’s Income Pyramid Surely, they are too poor to be targeted by markets.

  7. Single-Serve “Sachets” sell in India for ≈ 1¢ Shampoo Consumption India > US Indian companies sell tea, coffee, aspirin, and fruit juice in sachets 97% sold in sachets

  8. Mortality Rate of Young Children, 2008 109 Sachet of water purifier (10 cents) United States 8 Ethiopia sent 6 million sachets of PUR to Kenya, Malawi, and Ethiopia in 2007

  9. Some “Answers” of Markets and Government Shampoo sachets in India Water purifier sachets in Ethiopia

  10. Australian Pearl Diving, 1900-1915 Mother of Pearl Buttons Mother of Pearl Shells

  11. How is it Produced? Australian Pearl Diving, 1900-1915 Manual Air Pump with Malay Laborer Japanese diver

  12. How is it Produced? Australian Pearl Diving, 1900-1915 Piston Air Pump Cost $25,000 (in today’s $) and was expensive to maintain. White Australia Policy: The Australian government threatened pearl diving companies to hire white divers or face a ban on using immigrant labor. White diver

  13. Some “Answers” of Markets and Government Shampoo sachets in India Water purifier sachets in Ethiopia Japanese Pearl Divers White Pearl Divers is low is high

  14. CONTROL OF VACCINE: ARGUMENTS WEIGHED U.S. Government Role on Anti-Polio Injections Arouses Controversy By WILLIAM M. BLAIR Special to The new York Times.

  15. The incidence of polio did not increase steadily over the first half of the 20th Century. was lowest among infants under the age of one. was higher in the summer than winter.

  16. The Incidence of Polio, 1937-1965 The Incidence of Polio, 1937-1965 The Incidence of Polio, 1937-1965 Cases per 100 thousand people Cases per 100 thousand people Cases per 100 thousand people Gov licenses polio vaccine Gov licenses polio vaccine 29

  17. Who gets what society produces? Jonas Salk, Developer of Polio Vaccine President Eisenhower & President of March of Dimes O’Connor Secretary of Health Hobby decided argued government should allocate (the scarce) polio vaccine in 1955 government’s role ends with licensing… leave allocation to the market

  18. Panicking over Swine Flu, 2009 Pooh thought to himself: “If the pig sneezes, he’s friggin’ dead.” Huffington Post, 04-30-09

  19. Swine Flu Plan Would Put Swine Flu Plan Would Put Some Ahead for Vaccine WEDNESDAY, July 29, 2009 Swine Flu Plan Would Put Some Ahead for Vaccine Swine Flu Plan Would Put Some Ahead for Vaccine Swine Flu Plan Would Put Some Ahead for Vaccine Panel of experts lay out plan for handling shortage By Denise Grady (7/30/2009) Supply = 120 million doses Demand >>> 159 million doses Demand >> Supply Shortage! Gov. Distribution Plan

  20. Some “Answers” of Markets and Government Shampoo sachets in India Water purifier sachets in Ethiopia Japanese Pearl Divers White Pearl Divers is low is high Polio Vaccine in April/1955 (Secretary Hobby) Swine Flu Vaccine in 2009

  21. At Congressional hearings in the summer of 1955, the U.S. Surgeon General was asked: “Could it be that the vaccine was Hollywoodized and publicized before it was adequately tested?” The Surgeon General was sure that the vaccine was safe and effective. How could he have been so sure?

  22. Salk Polio Vaccine Field Trials of 1954 School Districts 2.5 million 2nd graders Volunteers Non-Volunteers Vaccine Placebo 36 cases per 100,000 16 cases per 100,000 57 cases per 100,000 Only 28% [(16/57)*100] as many cases among the treatment group, implying that the vaccine was 72% effective.

  23. Chimney Sweeps Percival Pott (1775): (Cancer Rate)CS > (Cancer Rate) non-CS Association versus Causation: Perhaps there was something else in their lives that was causing the cancer A few years later… (Cancer Rate)CS Naked CS Holland Banned  Chimney Sweeps (CS) England Not Banned No ∆

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