I took one business class in college. It was a general business class for non-majors and "not so bright" business majors that have rich daddies. And in this business class, we received a taste for accounting (the Brussels sprouts of business, good for you but no one really like it), business law (tofu, no one really understands what tofu is, but they know they have to eat it), marketing (pizza, easy to understand and everyone likes it), finance (spinich, tastes good, but you really don't know why) and economics (white rice, a lot of starch, not a lot of nutritional value).
Okay, that's what I thought until recently.
My husband and I went to a lecture by an economist. Not my cup-o-tea, but I had to attend the lecture. When I think of economics, I think of supply side, I think of "butter and guns", I think of voodoo economics (thanks to Bush without the W – remember he charged Reagan with that). But this lecture was different.
This man talked about economics in a different way – he made it seem interesting, made it seem more real. And it was not about money. He made economics about incentives. And that makes sense to me. I mean, money makes transactions easier, but most people do not buy and sell things because of the money. They do so because of what money represents.
For instance, I have ten dollars in my purse, and if I pass a coffee shop (not Starbucks), I can enter and purchase a fived dollar cup of flavored coffee if the value of the coffee exceeds the five dollars in my purse.
Oh, that example is not about incentives. Try this one.
Lets say I make $35,000/year doing a fairly trivial job. It is 40 hours per week, with no overtime, and no real mental stress. I am offered a "managerial job" that pays $40,000/year, with potential for me working an additional 20 hours per week, with more mental stress. Well, that's about 1,000 hours. So I would be working for $5/hour for the extra hours, and my job would be tougher. So for me, the incentive is just not there.
In college, I was always unsure of buying guns or butter, especially since I had little experience with either. I was part of the Parkay® generation (butter-Parkay®). Me, I am liking this new economics.
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