Freakonimics Analysis

The chapter starts by giving the example of how the head of Coca-Cola Europe decided to give away Coke to East Germans as the Berlin Wall was falling in 1989. This gamble, which began as a loss, eventually paid off for Coca-Cola. Six years later, the former East Germany had matched West Germany in the consumption of Coke, an excellent example of the power of markets. The author gives a simplistic explanation of the communist economy. There is no law of supply and demand. The price of an item is the same regardless of where one buys it. This is due to the fact that every business is paid the same by the government for selling a specific item regardless of the amount sold. Our economy is a market economy and economists make two important assumptions.

The economy of the world is changing all the time. We have had our ups and downs, but with the help of insights from economist, we have been able to sustain a decent economy. In Naked Economics, Wheelan discusses how a country can have a successful economy. He discusses why countries are poor and why some other countries are doing lavish things, like buying a cake for a dog. The reason behind it is because the richer countries are more productive and allocate resources and the poorer countries aren’t as efficient and don’t allocate resources. Wheelan also wrote about how Steve Jobs and Bill Gates became as rich as they are. They made huge investments in human capital to become rich. They became rich because they had a product that people were willing to give their money for. There are many problems in different economies and Wheelan explains why they are failing. Some economies suffer from a poorly ran government and others suffer from the lack of information. Trade is a positive thing, but there are people that discourage it because products are imported from outside of the United States.

1. The first chapter in the book is about the market and its inner workings. The book briefly explains the idea of supply and demand, in which the price of a certain good or service will reach the point where all the demand is equivalent to the supply. However, the value of something is not determined by its necessity, but its desire within society, as seen by the difference in cost between a diamond and life giving water. Markets operate as they do because people try to maximize the amount of utility for themselves. Nevertheless, a strict rationalism model cannot be used for predicting all the occurrences of a market because of the ever changing behavior of people; thus economists must take precautions against

Chapter 1, the Lesson: One of the greatest fallacies associated with economics is that there is an abundance of economists selfish interests involved. Because are selfish nature men tend to see only the immediate effects of decisions. This is especially true when it comes to economics. Every group has it’s own interests and because of this certain policies that may benefit one group, may not benefit another group. Because of self-interest, groups will banter back and fourth persistently until a solution is reached. This is one of the first causes of

In the first week of classes we learned seven economic principles that would later be reinforced with examples in the class along with providing our own examples and analysis of the concepts in our own written work and debates about real world issues and events. We first talked about how incentives matter. In agriculture, and many other business sectors, incentives are very important and come in many forms such as subsidies or tax breaks from the government. It was also very important to learn about the shortages and surpluses that could amount from such incentives. For example, if the government were to give farmers prices above equilibrium, farmers would then be able to over produce above the demand levels. This is not to say that the government can’t sometimes improve the market outcomes. If a market failure is present and the government interferes, it would result in a positive market outcome. Next we discussed the importance of trade-offs and the opportunity costs behind those trade-offs. We make our trade-offs among three pillars of values: social/cultural, environmental, and economics and only when all three are balanced are we completely sustainable. In agriculture, trade-offs and opportunity costs are faced daily, and decisions should be made according to what is most sustainable now, and in the future. If a farmer decides to drain a wetland for more crop space to produce more (economic), the opportunity cost is the ecosystem being destroyed (environmental). Another example is if a farmer decides to farm organically, the opportunity cost is the increased yields of non-organic farming practices. Next I learned that rational people think at the margin. An example of this within agriculture is that a farmer does not think that he will hire five people to run two tractors, he thinks at the margin, hires two people to do the job, and therefore profits from that decision. I learned that markets are a good way

Freakonomics is basically a book that explains its own version of the economic history. Dating all the way back to the 1800s with some stated facts explaining what incentives are and what type of incentives there are and what they're used for. Basically there’s a way to motivate someone and set them on a clearer path and bettering themselves in the future. One of the best motivations would be money because well money can get you anything in the world. Clothes, food, and car, Etc. They are a great way to motivate and give people that mind set to work for their money and not just lay there and wait for it on a silver platter. I feel like that people who work against people who never worked. They know more about the struggle than anything. Which is why they actually care when they get money and they spend it wise. Obviously the rich wouldn’t care to get or not because they already have enough to fall back on.

David Colander defines economics as "the study of how human beings coordinate their wants and desires, given the decision-making mechanisms, social customs, and political realities of the society” (Colander, 2010, p. 4). Coordination in this definition refers to production content, method, recipients, and even quantity. To think like an economist one must analyze every situation by comparing the costs and benefits and make any decisions based on those findings (Colander, 2010). The study of microeconomics zeroes in on the individual and analyzes how economic forces affect the choices he or she makes.

Also, there is such a thing called supply and demand, and the consumer chooses what is needed or wanted. This article also signified the evolution of the English economy of moving away of mercantilism capitalism. Both the articles had a significant impact on the societies of each state.

Freakonomics is a humorous and intriguing book about taking off the top layer of a situation and understanding what is happening underneath. Through everyday examples Steven D. Levitt and Stephen J. Dubner take perspectives that are unheard of in any other writing while simultaneously comparing the most unique and uncommon ideas to each other. As they study everyday life, readers see insight to the ways in which the world really functions and runs. As they study the world the authors continue to ask questions, thus continuing to challenge the reader to seek for a deeper answer. Through these highly untypical questions, Levitt and Dubner are able to display that the root of economics itself is incentives.

Levitt and Stephen J. Dubner, Levitt and Dubner utilize intriguing rhetorical questions, compelling anecdotes, and interesting allusions to refute the legitimacy of conventional wisdom. Freakonomics also attempts to inform and entertain readers with interesting facts. Levitt and Dubner explicitly reveal their purpose when they state that “the aim of this book is to explore the hidden side of . . . everything” (Levitt and Dubner 14). The authors intend to debunk commonly held beliefs by looking into a wide range of unusual inquires, and they use rhetorical questions such as “what do schoolteachers and sumo wrestlers have in common?” in order to lead into deeper issues(Levitt and Dubner 15). Like Socrates, Levitt and Dubner rely on questions as a means of achieving deeper understanding, and while outwardly sumo wrestlers and schoolteachers don’t have much in common, Levitt and Dubner reveal that both are connected in an unexpected way:

From two perspectives, we see a world plagued by the ignoble aspects of human nature. Through one set of eyes we are shown the global ecosystem imitating the opening motions of a mass extinction, through another we see the inevitable and hellish effects of culturalized greed. In both cases we are treated to the observations of an aggrieved observer, but the means by which these observers show us their perspective on the world are by no means identical. Here we will explore the strategies, expressions, argumentations, and appeals of two authors with intertwining stories to tell.

Steven Levitt was born May 29th, 1967 in Chicago. Levitt is an american economist that is known best from his podcasts, and books, Freakonomics and Superfreakonomics co-authored with Stephen Dubner. Steven Levitt is also known to study some very different topics such as crime and the link between legalized abortion and crime rates. Levitt attended the University of Chicago, the Chicago school of economics, and he attended Harvard University to receive his Bachelor 's Degree and went on to MIT for his PhD in economics. In 2003 Levitt was awarded the John Bates Clark medal, an award that is given to recognize the most outstanding economists under the age of 40.

But perhaps the most prevalent tone is the authors’ sense of conversationalism and humor. Levitt and Dubner often use slang, including some unconventional writing styles, and joke with the reader, all while maintaining focus and applying the facts to the topic at hand. This usually shows up in small, yet noticeable ways. It is always apparent that the authors are talking directly to the reader as if there is a conversation going on between them. They will often say things like: “But let’s consider...” (144). Or when presenting new information: “Now, here’s what it cost...” (101). The most commonly used devices in Freakonomics; however, are questioning the reader and the use of short, emphatic sentences. When used together, as they sometimes are in this work, Levitt and Dubner can have a big impact on the reader’s thoughts. As they begin to discuss the

I found it very helpful how Levitt and Dubner included an introduction to this book. The title Freakonomics, gave me an idea that it’s going to be about economics, however I wasn’t exactly sure. In the intro, both the authors explain why they are writing this book and how they are going to inform us about the hidden side of everything. The way the authors open this book was really helpful and it gave me any idea of what to expect. Now that I know what this book is going to be about I can’t wait to read about the hidden sides. For many of the readers this is a new experience and along with them, I am also expecting to learn something new.

imagine living in a world in which there are infinite amounts of goods and resources to satisfy every human desire. People will not find need to budget their limited incomes, businesses will not worry about the cost of labor, and governments will not have reason to tax its citizens, or give importance to environmental issues. People living in this society will be equal to one another and everything would be free, like water in the ocean and sand in the desert. All prices would be zero and society will not find need for markets or financial institutions. Unfortunately we do not live in a utopia of limitless possibilities; we live in a scarce world of unlimited wants. Given unlimited wants, we must make the best use of our limited resources, a science our ancestors have developed and named economics. This study measures how societies use scarce resources to produce valuable commodities and distribute them efficiently among different people.