TANSTAAFL TRIBUNE -- Week One No. 1 12 12 2017.docx

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TANSTAAFL TRIBUNE "There ain't no such thing as a free lunch" BA 161 Week One No. 1 "Here we are, two million males, less than one million females. . . . Then add tanstaaf . When thing is scarce, price goes up. . . . Women are scarce . . . that makes them the most valuable thing in Luna . . . as men without women don't care whether they stay alive or not" (Heinlein, 1966, p. 164) The phrase "there ain't no such thing as a free lunch" (TANSTAAFL) was popularized by science fiction writer, Robert A. Heinlein, in his book The Moon is a Harsh Mistress ; it is the foremost unofficial law of economics. Economists soberly refer to this law as opportunity costs (see pages 13-15 of our text for a discussion this concept). The adage "you get what you pay for" is another way to define opportunity costs. Every purchase you make or activity you pursue has a cost. For example, even if your favorite economist buys you a free lunch, you forgo other activities (opportunities) such as having lunch with someone who might have a sense of humor . . . :) Again, welcome to BA 161 -- Macroeconomic Principles ! I hope you enjoy this journey. Even if you think economists are on the lunatic fringe, you will discover economic principles that can be applied to your everyday life as well as your workplace. This week and next, we will cover some basic concepts of economics, such as opportunity costs, then, in weeks 3-8, our focus will shift to macroeconomics. Why Study Economics? The ideas of economists and political philosophers, both when they are right and when they are wrong, are more powerful than is commonly understood. Indeed the world is ruled by little else. Practical men [and women], who believe themselves to be quite exempt from any intellectual influences, are usually the slaves of some defunct economist. -- John Maynard Keynes All of us are affected by economic conditions and can benefit from a better understanding of local, national, and global economic forces. For example, several years ago, 500 workers at a paper mill here in Northern New York lost their jobs because they didn't understand the economic forces affecting their industry. These workers decided to strike for higher wages. In response, the company replaced them. At that time, economic conditions in the paper industry were weak; there were plenty of unemployed paper-mill workers looking for work. Unfortunately, the strikers were never rehired, even though their union eventually accepted cuts in pay and benefits amounting to about $10,000 per year per employee. This was particularly devastating to the strikers because, given their skills, most had little hope of finding jobs with comparable pay and benefits. In addition, the small town of Glens Falls suffered economically and was divided socially. Moral of the story: If the union leaders
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