Why Nothing Is Ever Certain When in Economics

Published: 2021-06-29 07:05:20
essay essay

Category: Miscellaneous

Type of paper: Essay

This essay has been submitted by a student. This is not an example of the work written by our professional essay writers.

Hey! We can write a custom essay for you.

All possible types of assignments. Written by academics

GET MY ESSAY
One of the reasons why so many people find it hard to grasp the concept of economics is that it involves few certainties. A question of how to best approach globalization broached to one half of a group of economists would yield one answer and the same question posed to the other half could be completely different. As Charles Wheelan states at the beginning of Naked Economics: Undressing the Dismal Science, "Economics starts with one important assumption: individuals act to make themselves as well off as possible" (Wheelan 6), which explains why the answer to any economics question is "it depends." As people change over time and across cultures, so do economics; Wheelan emphasizes this relationship in Naked Economics by analyzing a plethora of examples in which the very economy is based upon human interaction.
Early on Wheelan approaches the concept of maximizing utility as a constant force on a nation's economy. As Wheelan states, "most of the benefits of having a large family have disappeared in the industrialized world" (Wheelan 11), in response to falling birth rates. While this may be bad for the United States, a child living in such an industrialized nation is not needed to work on a farm or work in a factory to provide for the family--and the costs of raising a child in addition to a possible job loss is devastating. Therefore, families have maximized utility by only having one or two children, a movement that has had a profound effect on the economy.
One example Wheelan uses to demonstrate how incentives affect human behavior in the pursuit of utility, in turn affecting the economy, is the poaching of black rhinos. "A single rhino horn can fetch $30,000 on the black market" (Wheelan 23), which makes for a tumultuous trade in which more rhinos are killed only to have the price skyrocket. Here the incentive would consist of cutting of the rhino's nose before it is poached--theoretically saving its life so that the population might stabilize and keep the cost of rhino horns from reaching epic proportions. Then again, Wheelan notes, many hornless rhinos are killed anyway because it "saves the poachers from wasting time tracking the same animal again" (Wheelan 26). Once again, the unpredictability of human behavior has all but nullified one possible incentive in favor of maximizing utility.
Even in the seemingly callous realms of business and information, human interface profoundly affects how anything is implemented. "Branding," Wheelan writes, is where "companies spend enormous sums of money to build an identity for their products," and he continues, "Branding helps to provide an element of trust that is necessary for a complex economy to function" (Wheelan 91). The best and most prominent example Wheelan employs is that of McDonald's and its golden arches. Once a business has established trust between itself and the people, it creates a virtual monopoly in which people will choose McDonald's because they are familiar with the restaurant and everything in it. As Wheelan writes, "McDonald's sells hamburgers, fries, and most important, predictability." While McDonald's

Warning! This essay is not original. Get 100% unique essay within 45 seconds!

GET UNIQUE ESSAY

We can write your paper just for 11.99$

i want to copy...

This essay has been submitted by a student and contain not unique content

People also read