Heather's Homework

What concepts or theories did you find most interesting and/or useful?  Is there an area where you changed your thinking? And on the content in this chapter - Asymmetric Information and Adverse Selection is a topic that many of you find interesting (and me also).  Here's a video on how it effects the used car market:  https://www.youtube.com/watch?v=sXPXpJ5vMnU  (Links to an external site.) Links to an external site. How do you manage the affects of asymmetric information when you are shopping? The ideas of asymmetric information and signaling were interesting to me. How people respond can reveal what is actually the case, as with choosing health and car insurance policies. I especially related to the example of gift giving...it reminded me of a conversation I just had with my boyfriend in which I said that it doesn't really matter what the monetary value of the gift is (or even fulfilling any particular wish list) because what I'm really paying attenti...

This is a complicated chapter.  What did you find most confusing?  What do you think about the concept of indifference curves in the context of budget constraints? Does the concept of indifference curves add to your understanding of demand curves?  The existence of prices and income clearly leads to budget constraints.  Do you think about trade-offs for large purchases (ie a car payment versus rent/mortgage)?  How about small purchases?  Does timing matter (probably you aren't purchasing both a car and a house at the same time)?  How does the concept of indifference curves inform your thinking about purchases? Indifference curves help me visualize the optimal levels in the trade-off between two choices. But there is still much room for ambiguity depending on consumer preferences, influenced by whether the income effect or substitution effect is greater. Although the graphs helped me see how the changing prices affected the outcome, I had to rea...

Write a 200 to 250 word summary of this chapter.  Be sure you capture the main ideas.  (But don't go over the word limit -- the point is to try to write the summary.) There are many ways to measure income inequality across society, and none of them alone give a complete picture of the variation in standard of living. Several political philosophies have developed in response to the question of what the government should do about inequality. However, policies intended to create more equality can sometimes alter behavior in a way that creates less efficiency.