Friday, February 15 - The Wild and Crazy Market for Thingamajigs

Wow!  Great day in class where you demonstrated consumer behavior. 

In the beginning of the simulation when everything was Ceteris Paribus,  there was some chaos trying to establish price.  Definitely the businesses had to learn to price their thingamajigs to what people could pay.  There is a reason why there isn't a Porsche dealership in Lincoln.  Once the market was set - the demand for Thingamajigs was set.  We had a graph looking like this. 



Then we had a disaster - say a hurricane and Thingamajigs were mandatory for survival.  Our market really popped.   Thingamajigs were more in demand and businesses quickly sold out.  Consumer expectations for survival made people bargain - but less.   I heard some business say "Can you put a price on your life?"  That caused our curve to do the following.  There was a bit less bartering.   But some people struggled to buy.  But the chance for higher profit made more quantity become available. 



But government did step in and moved the curve back to before the disaster.  BUT that did take away the stress of trying to find Thingamajigs and more people got them .... until they ran out.  The businesses had no incentive to go replenish. 

So, which is better?  Is there a happy medium? 

Congratulations to the buyers Joy, Tyson and Zen.   They did the best at bargaining.  On the business side,  Jerick and Zach were the masters of the game and profit.  Next week,  I will bring prizes to class. 

THURSDAY - Valentine's Day and a Lesson on Demand

One of the wonderful things about Economics is that it shows you how to anticipate the market - buyer and seller behaviors.  Understanding gives power. 

This lesson simulates a market for “thingamajigs” before and after a natural disaster like a hurricane, and with and without government-imposed price controls.  Students, acting as buyers and sellers, experience the ability of markets to adjust to the increased scarcity caused by the disaster, and how price controls confound those adjustments, resulting in shortages.  

Before the disaster - you were behaving like a normal "Law of Demand" situation.  Allison and Shelby were doing a great job at keeping prices low to keep the sellers coming back - but being careful that there was a price that was too low.  Jackson and Jo did offer prices that were too low that had people rushing to buy - but in real life, they would've ended up bankrupt.  


But when the disaster hit - the law of demand changed and a new and now a new curve is needed.  People's tastes and preferences and consumer choices changed.  We ended up creating a new curve - that at all prices people demanded more thingamajigs.  I particularly commend Jazerius and Hattie's team for how quickly they adjusted to the new prices.  



Did some people not have enough money?  They were squeezed out of the market.  Is it fair that survival is based on who has money? 

THAT is where Rule of Law can come in and change the market.  It brought order and ended the chaos - but there was no real incentive for businesses to get more Thingamajigs.  They would lose money with the price control. 

So, markets are great in adjusting to changes in the economy - but they are not necessarily fair to everyone. 

Great job today, people!  I will post winners tomorrow. 

Don't forget our quiz on THURSDAY. 

Friday, February 8 - What a Great End of the Week

It was another fun day in Econ class.  For a class that is involved,  has great simulations and discussions - why work doesn't get turned in really mystifies me.  How can I incentivize homework has been my rumination lately. 

Sylas had the best DMU curve of all the classes.   Zen - a bit of an outlier in the graph - that did look more like an EKG,  but his utility did have a decreasing pattern - kinda.   Thanks to the recorders of data, Anthony and Tyson. 

The assignment of the week is 1) CATCH UP ON YOUR LATE WORK; 2) a short exercise in DMU and 3) did I mention CATCH UP ON YOUR LATE WORK? 

Thursday AM Econ Blog for February 7!

What a fun time we had with the eating of Potato Chips.  3 of the 4 who participated did have graphs that demonstrated that more and more consumption did not create more satisfaction.   Jo, in particular,  had a graph that demonstrated an obvious shift.   Jackson - he was what we call in statistics "an outlier."  He varied from the others in results.

Diminishing Marginal Utility (DMU) is a real thing that businesses all have to contend with.  In particular,  the pathways we have on Thursday.   Culinary cannot spend a career making exactly the same thing and expect profit.  You always have to "change it up."  But I think Arianna brought up that you can change things and drive business away.  AgBio needs to find more efficiency in selling our ag products - what makes US products better than Argentina's?  Price is important - but how can we make our exports more appealing, beyond our gift of making things cheaper?

The K-12s - trust me,  a teacher has to change things up.  Otherwise teacher and students will quickly have Diminished Marginal Utility.   I feel certain that that happens in the prison culture as well, for our CJ student in class.  Rotation of duties keep people there and engaged.

Next week - we will learn more about how disasters can teach us about production possibilities curves and demand / supply situations.

GET WORK FINISHED!

Wednesday PM Reflections for February 6

It was STOCK DAY!  I was so impressed with the choices made.  Your portfolio is showing something important called DIVERSIFICATION. 

What is that?  Usually - students do the Omaha Billionaire Warren Buffett (Berkshire Hathaway) stock choice method of buying what you know.  Nothing wrong with that,  but it usually leaves teenagers heavy in consumer goods.  If the economy is going strong,  that can be a great ticket to the Top 10.  BUT,  as the DOW is suggesting today - the weather for the US economy is "mixed."  Partly sunny but there are clouds building on the horizon.  That is why it is good to have goods from different sectors. 

You have medical stock, transportation,  consumer goods and a service.  You have diversification that might balance your portfolio if people slow down their spending - which as you noticed yesterday - weather is keeping people from Target. 

We started some work on Diminishing Marginal Utility with eating chips - and we will complete that next week. 

PLEASE COMPLETE YOUR HYPERDOC on Comparative Economics and do the journaling. 

Watch the Market -  Use bloomberg.com and watch Jim Cramer on Mad Money (CNBC network.) 

Thoughts After Wednesday AM Economics - February 6

It was without a doubt - a catch up day for us in class.  I want to again express my alarm that with midquarters now behind us, how many people have done NOTHING in Economics.  You have this week to get caught up.  Please use it. 

There will be a brief quiz over DMU - Diminishing Marginal Utility and the lecture we had on the Institutions of Market Economies that we want to use when we compare economies. 

It was fun time in class.   But I would be happier if work was caught up! 

Reflections from Thursday and Friday Classes

There are 7.35 Billion people in the world (2017 - Google)  and I do believe in Adam Smith's Invisible Hand - that one person working in their own self-interest is likely to be the same with many people.  But I never cease to be amazed at all the different ways people answer the questions of what to produce, how to produce and for whom to produce. 

The same goes with economic systems.  The Circular Flow Model with government is pretty standard in the world - but there are so many little differences.  Differentiating what is the "real capitalism" is like judging which snow flake is prettiest.  They are all unique. 

That is why Douglass North's work to help us to look at differences in economic systems,  and be able to judge if an economy will thrive or dive - helps.   The differences are interesting. 

I mentioned that I was in Cuba in the summer of 2018.   I was fully prepared for a complete command economy - where the government answered the 3 basic economic questions.   I was completely dumbfounded within an hour on the ground that Cuba has established markets, where buyers and sellers can freely meet and exchange goods and services.   Though "cash" in Cuba is a bit tricky.  Mind you - you could go to roadside markets to buy food,  but you also had government markets that you had coupon books to give you a food allotment -  roughly 800 calories a day.  Not really enough to thrive. 

I also was completely surprised at the amount of entrepreneurship - male and female - in the country.  The Cubans had a work ethic I'd put up with Americans. 

BUT,  Cuba must overcome the problems with private property (which has a complicated relationship with government / public and private ownership)  and is very inefficient.  Also,  Rule of Law is an issue.  I didn't directly witness it,  but in speaking with people, I heard that the rules for foreigners - who were going to be investors in the country - i.e. Chinese and Vietnamese - were allowed more freedoms and weren't as subject to law and order as I was as an American in Cuba.  In other words, there were things I could not do because I was an American that Chinese could do. 

I also have to say that the discussion on Thursday about income inequality was top notch.  It was a discussion I would've looked for in a college class.  The variety of observations I heard really had me thinking - I went to bed that night still considering what I heard.  Fascinating. 

So,  have fun studying what capitalism means in different countries this week.  Next week,  how potato chips can teach us about marginal benefit and cost. 

Friday, January 25 - 2 Hours Is NOT Enough Time

So, what was the purpose of what we were doing today?  We were learning how markets worked and establish prices.  Who were the sellers?  The yellow-card emigrants were selling their labor potential.  You had 4 classes of workers from highly skilled to no skill convicts.  NEVER ASSUME that we all start equal at some starting line when we go out looking for jobs and opportunities.  Choices and consequences,  along with your abilities to market yourselves make a difference in if you achieve or not.

The goal was to sell your labor to the businesses - in this case, ship captains and agents for plantations in the south and West Indies (Caribbean) sugar cane fields.  These were the buyers.  And like I said in the title - from what I overheard as well as what I noticed in the paperwork I received - you four would've given the Robber Barons of old a run for their money.  Good job to Richard, Andrew, Jerick and Zach!  They did not have any conscience about taking advantage of the emigrants inexperience and ignorance.  They owned the poor emigrants!

Now,  we didn't get to play all the rounds I would've liked to - but I want you to take a look at another class and what was happening on their multiple rounds.

The more rounds,  they were converging on a price point of around four years - very close to the historical equilibrium in the indenture markets of the 1700s of 4 years and 8 months.  As people played the game more - they came to appreciate their abilities and market themselves better.  They knew their "value" or as we say in Economics -  utility.  While at first - no one knew their utility and we had contracts all over the place time wise.  But as both sellers and buyers became more savvy,  we would've reached a number very close to what other classes reach.

I urged the emigrants to ask more questions and become better informed about where they were going and what they would be doing.  Quite a few of you ended up with Richard going to Jamaica.  Living in the Caribbean in the 1700s was not good.  70% death rate within 36 months for indentured people on the sugar cane plantations.  What killed them?  1) Malaria;  2) infections - bug bites, snake bites, cuts in the constant heat and no antibiotics created bacterial infections that made sepsis look like a common cold.  3) Dehydration in the heat and a lack of clean potable water and 4) Sugar cane manufacturing was INCREDIBLY dangerous with fires, explosions and see the above.  Adi never mentioned that, did she?

Historically,  that four years mark "broke" the indenture market,  since it became more costly to have an indentured servant than what you would get out of them in work. When costs exceed benefits - we cease an action.  And unfortunately,  this is why slavery became an economic choice in particularly the southern United States.  Remember that a choice might be economically right - but morally wrong, wrong, wrong.

Consider items you currently buy.  Have you ever noticed that when a new market opens - prices are all over the place - consider cell phones and wearable fitness items.  Over time,  consumers and businesses find the "ideal price"  and it always needs to be a price the consumer is comfortable spending money on and businesses can make profit.

It was a fun day - I definitely felt the psychic income.  I hope you did as well.

Now, who "won":  DRUMROLL:   The winners are for the emigrants is JOY!  The Captains:  Jerick vaulted ahead when he convinced someone to sign a 10 YEAR CONTRACT.  Way to go!  But,  all the captains - Zach, Andrew and Richard - All of the above named,  come and see me in 

Friday Economics

We had a session where we discussed the incentives to work - according to Adam Smith.  I have to say that I found today filled with Psychic Income.  (See slides in Week 002)

I only glanced at the work done with the Factors of Production - but the students present really demonstrated an understanding of what those factors look like in your pathways.  You are different from all the other pathways in the school in that "land" is not a tactile thing - something you can touch.  You had discussions about how labor and capital are different as well - it had me thinking differently as observations were made.   Entrepreneurship also brought up things I had not thought about.  But you all should understand that all four factors are needed before you can create a product or service.  For those gone - (See slide #2 from the blue slides in lesson 002 and do the assignment from page 8-9)   Talk to those who were in class for help.  I will probably update this blog with some of your work next week. 

We had a great lesson on opportunity costs and benefits and solved the problem of where Tyson should go to lunch.  We were all worried about that one.  Next week we will be doing more with decision grids in a micro and macro way. 

I pulled together an alternative activity involving property rights and WOW did I see the economic behavior and choices between two groups - and I did not give any prompts.  I will try to explain what we did for those that weren't there in the assignment I will be posting by Monday. 

Have a great weekend people and I look forward to having a full class for next week's simulation. 

Thursday AM January 17 - You Were Kids that Could've Given the Robber Barons a Run for Their Money

First things first:  Someone left this coat in 205.  I took the jacket to the Office.

So, what was the purpose of what we were doing today?  We were learning how markets worked and establish prices.  Who were the sellers?  The yellow-card emigrants were selling their labor potential.  You had 4 classes of workers from highly skilled to no skill convicts.  NEVER ASSUME that we all start equal at some starting line when we go out looking for jobs and opportunities.  Choices and consequences,  along with your abilities to market yourselves make a difference in if you achieve or not.

The goal was to sell your labor to the businesses - in this case, ship captains and agents for plantations in the south and West Indies (Caribbean) sugar cane fields.  These were the buyers.  And like I said in the title - from what I overheard as well as what I noticed in the paperwork I received - you four would've given the Robber Barons of old a run for their money.  Good job to Adi, Lydia, Emma and Jackson!  They did not have any conscience about taking advantage of the emigrants inexperience and ignorance.

Now,  we didn't get to play all the rounds I would've liked to - but I want you to take a look at another class and what was happening on their multiple rounds.

The more rounds,  they were converging on a price point of around four years - very close to the historical equilibrium in the indenture markets of the 1700s of 4 years and 8 months.  As people played the game more - they came to appreciate their abilities and market themselves better.  They knew their "value" or as we say in Economics -  utility.  While at first - no one knew their utility and we had contracts all over the place time wise.  But as both sellers and buyers became more savvy,  we would've reached a number very close to what other classes reach.

I urged the emigrants to ask more questions and become better informed about where they were going and what they would be doing.  Quite a few of you ended up with Abi going to Jamaica.  Living in the Caribbean in the 1700s was not good.  70% death rate within 36 months for indentured people on the sugar cane plantations.  What killed them?  1) Malaria;  2) infections - bug bites, snake bites, cuts in the constant heat and no antibiotics created bacterial infections that made sepsis look like a common cold.  3) Dehydration in the heat and a lack of clean potable water and 4) Sugar cane manufacturing was INCREDIBLY dangerous with fires, explosions and see the above.  Adi never mentioned that, did she?

Historically,  that four years mark "broke" the indenture market,  since it became more costly to have an indentured servant than what you would get out of them in work. When costs exceed benefits - we cease an action.  And unfortunately,  this is why slavery became an economic choice in particularly the southern United States.  Remember that a choice might be economically right - but morally wrong, wrong, wrong.

Consider items you currently buy.  Have you ever noticed that when a new market opens - prices are all over the place - consider cell phones and wearable fitness items.  Over time,  consumers and businesses find the "ideal price"  and it always needs to be a price the consumer is comfortable spending money on and businesses can make profit.

It was a fun day - I definitely felt the psychic income.  I hope you did as well.

Now, who "won":  DRUMROLL:   The winners are for the emigrants Shelby Parrott and Hattie Buell tying.  For the ship captains / agents it was Adi Holmes  - but all the captains did a great job.  So, Lydia, Emma and Jackson - you can come to room 200 tomorrow and collect your donut.  Which Lydia and Jackson did not do!!!

Wednesday PM January 16

No other way to get people excited about Economics.  The Stock Market Game is a fantastic hands on way to learn about markets, supply, demand and both consumer and business behavior.  I am looking forward to getting into the game - this isn't an easy market right now - so it will be harder to turn profits and keep them. 

But, keep in mind, that no one named "Guido" is going to show up and break your leg if a trade goes bad.  This is a pretty safe way to begin to learn how the market works. 

Goal for the week is to have a write up about three stocks you'd like to sell your group on next week.  Tell who the company is,  what they produce, and why you think they would be good to buy for a long position in the market. 

Looking forward to seeing what you find. 

Reflection After Wednesday AM

For a class of 45 we can have some interesting times with simulations.  Today's indenture game wanted to show how the market can work its way to equilibrium.  There was some interesting negotiations that I overheard.  I think some of you discovered that it wasn't a level playing field - we all didn't start equal.  Some people because of skills or negotiating skills,  you were able to get a jump start.  Compare that to the convicts - they were "winners" if they could at least get to the New World.  If they stayed, they would be hung.  Also,  where you ended up tended to have an influence on "winning."   Remember what I told you about ending up in the sugar cane plantations of the Caribbean. 

You can see how the market prices clustered the more we played.  We got close to what was the equilibrium in the early 1700s - 4 years and 8 mos. 

Winners:  Connor Birkholz won for the emigrants,  and Jackson Quevedo - who managed to get a 12 year indenture contract - won for the captains / agents.  I would like all the captains / agents and Connor to stop by 205 tomorrow morning and collect your donut! 

Don't forget to do the debrief, readings,   and think about the opportunity costs and benefits of your own choices.  There might be a quick quiz over the reading and one-pager. 

Have a great week!

January 14 Monday Econ

It was a grey start to the day,  but things quickly warmed up in class.   A lot of you did a fabulous job with the 4 Factors of Production drawing. 

As far as our simulation - we only had two rounds - but I think you could see the trend line I drew - showing how do we find "prices" in an economy?  If you notice - in the first round,  when you had no idea about the value of your labor,  you have no idea what price you should ask for.  You will notice in round one,  prices are all over the place.  But in the second round - when both captains and emigrants had an idea of what prices should be - we are beginning to see a market stabilize.   I am sorry that I didn't time things out well today.  Watch the other classes when I post their data sheets - you will see that the market does work its way down to cluster around 4 years.  That ended up being too short of a period for most people that paid for the labor.  It is why slavery took over as the "labor of choice."  A sad era of US history began as an economic choice. 

More rounds would've demonstrated how the market finds prices.   What items do you see this happen with in your lives?  (Hint:  you probably have one in your pocket) 

As far as negotiating -  Bravo for using the 3 economic questions of What to produce, How to produce, and For whom to produce when you were negotiating.  It also helped with the captains to evaluate who they wanted. 

BTW:  Congrats to Brooke Lindquist for winning the  most emigrant points.  Captains / Agents was won by Sky Putnam and Myles Kroll.    Also,  if you signed on with Karlie Muff  and took her up on a new life in the Caribbean - you likely DIED within 3 years.  Starvation, dehydration, malaria, infections,  horrible accidents at the sugar cane plantations killed 70% of emigrants. 

No class this week - but you do have assignments to do in Week 002. 

Friday AM Economics

OMG!  Today was so much fun for me as a teacher.   Our managers, Eli, Ethan, Logan and Finian did an outstanding job at channeling Jamestown overseers.   I saw strikes,  indentures that ran away,(Richard)  etc.  You really should've had a feeling for what early life at Jamestown was like.  The idea of a reward that was seven years in the future wasn't enough incentive. 

Thus Jamestown learned - and other colonies as well.  Incentives needed to be offered immediately.  Frankly,  people learned that they were in shortage in the New World,  so they could demand private property rights more than people living in Europe, Africa or Asia could.

As you go through the following week - think about the role of incentives and private property in your own life.  What makes you respond or not respond?  What incentives would get a desired response?  

Your assignments are posted.   The debrief will be assessed and is due next Friday.   

I had psychic income today - but I don't think many of you realized the looks you were getting from people outside of class.  There were some priceless looks.  Luckily,  I had warned the office what we were doing.  Otherwise I think we would've had some "interventions."  

I invite you to look at the rest of the week's blog posts.  I've got some pictures and observations that might mean something to you.  

Reflections After First Class - Thursday

Last semester,  I learned that the humor of my Thursday class is special.  I found that this semester - I will laugh a lot during our two hours.  😆 

Thank you to my bosses of Ian, Isaac, Carlos and Brandon.  You did great work.   I saved a couple of the papers - I wonder if the Jamestown settlers sent such letters back to England?

It was a massive shift in thinking to give private property rights to all and pay everyone for their individual work.  In European, African, and Asian history - this had not really happened.   Jamestown's experience was picked up by other colonies and a big reason why our country jumped ahead of many in the world.  

Incentives - of course, profit 💲💵💰can motivate a lot of behavior.  But I have met business people that have complained that high school students don't perform to their expectations.  "I'm paying $9 an hour."  But,  I have asked "What do you offer in psychic income to incentivize your workers?"   

Money isn't the only incentive.  Work needs to be fun, fulfilling, rewarding.   For me,  days like this make work fun.  It keeps me motivated.  Don't get me wrong...I like my paycheck too.  But I stay in this job for the psychic income.  Often, that makes better workers.  

This coming week, think about the role of incentives in your life - both profit and psychic income.  Do they - or the lack of them - affect your economic choices?

I invite you to read the other readings from this week -  I have some more examples from Cuba.  

Reflections After Wednesday AM & PM Economics

I have to say that I LOVED our class today.  Thank you to our overseers of Grant, Caleb, Will, John and Jaston.   You were excellent!   You channeled the mean boss syndrome.  Okay - Will was a bit nicer - he didn't yell and I believe he did feed his group.

Wow!  I have a new respect for being the mean boss.  Since my afternoon class is so small - I played the boss.  Wasn't easy!  I got some dagger stares when I took candy for myself. 

I'm used to seeing the strikes in groups,  but there was a new phenomenon that has never appeared before.  I believe it was Grant's group that not only struck - they went looking for a new boss that would "feed" them.  I will have to look at Jamestown and see if this happened.  The choice to move was interesting to me.

I also heard some students wondering if this is what some government workers are going through when they are working without the incentive of pay.  Bravo for that connection.

Economics is about choices - and incentives as well as clear ownership of private property - help direct people and the resources to better productivity.  Jamestown, once those things were established turned into a flourishing colony and lessons learned there helped make our country an economic powerhouse.

Other people in the world struggle - and often I have found that lack of clear incentives and private ownership make the difference if an economy thrives or fails.  I'd recommend that you look at my previous blog showing the lack of incentives and private property are keeping Cuba from advancing.

Next week, we will be talking about the FIRST economist, Adam Smith, helped establish the rules of the game in capitalism.  We will also be learning about opportunity costs and benefits in graphing.   Of course, there will be another simulation.   In the meantime,  think about the role of incentives and private property in your own life.

Assignments are listed - and I would enjoy your comments or questions.

Reflections after Monday AM Econ

I had a fun first day!  Jamestown is an interesting opportunity to examine how incentives and private property can make the difference in survival or not.  It continues to work to this day with the examples of whether countries are prosperous or not.

As I was saying,  I was in Cuba - a country of real problems with incentives and private property rights.   This picture shows

The Communist government led by the Castros lets a person own their own apartment - and many Cubans have great apartments with many of the features we  have in our apartments. Frankly,  I was surprised at what I saw.  But there is no ownership or infrastructure (word from your readings) to maintain the building or the streets.  Hence,   things are a bit of a mess.  There are no incentives to try to fix more than what you know you own.  So, when you walked the streets and into the walk ups to apartments,  when the doors opened and you saw bright colors and 54-inch flat screen tvs playing Game of Thrones - I had an aha moment about Jamestown.  

Early in the history of the United States - the colonists figured that out and in a New World where the old traditions of Europe could not be enforced - our country quickly developed.  

We also talked about profit and psychic income as incentives to work.  More about that next week!  In the meantime,  begin to think about the role of incentives in the choices that you make.  

I also discovered that you are all too nice.  Usually with this simulation I have people screaming, threatening, and eating all the candy in front of the workers.  People went on strike a lot sooner.