Econ 150 Extra Credit #1

Econ 150 Extra Credit #1 - Payton Schanen Professor Ragan...

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Payton Schanen Professor Ragan Econ 150 October 23, 2016 “What is Voluntary? What is coercive?” In this YouTube video, Michael Munger was raising the question as to what is a voluntary transaction and what is coercive transaction as it pertains to the economy. He first defines what a voluntary exchange is in economics and the problems with a voluntary exchange. In economics a voluntary exchange is the basis of mutual benefit but the problem is that voluntary and coercive seem like they mean the same thing. He points out the example called “the gun and the purse” where a man points a gun at a women carrying a purse and demands that the women gives him the purse. Munger points out that most people think that the woman is coerced into giving the man the purse but in reality the woman made the choice to give the man her purse or the alternative choice was to possible get shot. He raised the question as to is a coercive decision always unvoluntary? Munger went on to tell a story from The Odyssey and “the island of sirens” and from that Munger made the analogy of the man giving one set of orders first and then to turn around and ordered his men to disregard those very orders in the future as what a binding, voluntary contract is. He voluntarily entered a contract that binded him to something that he knew he could get out of later, the essence of a contract.
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