Naked Economics Research Paper

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Owais Ansari IB Economics Ms. Lee 7 September, 2010 Naked Economics: It Depends Economics is one of the most unpredictable ideas in our world. Every single country has its own distinct economy, and some economies are more well off than others. In America, the economy relies on a little thing called consumer sovereignty. This ties in with the idea of popular sovereignty. Basically, consumer sovereignty means the people rule and always act in their best interest. In a way, consumers cast votes on how the business run by buying, or refusing to buy, certain goods and services. As Wheelan states it, “Economics starts with one important assumption: individuals act to make themselves as well off as possible” (Wheelan 6). Varying human…show more content…
Wheelan agrees with the fact that humans always act in order to improve their utility. The largest factor that determines how humans want to receive their utility is through incentives. Whether you are a consumer or a producer, incentives drive a great portion of the decisions you will make. People usually bear motives in mind for making one decision over another; most people reach a decision based on their personal utility and what incentives appeal to them the most. The idea of human decision spawns from the thought that every decision made will have a trade-off. Wheelan discusses how whenever we make one choice, we are always giving something else up in return. Wheelan also uses many examples of decisions that relate to the Average Joe. For example, say an industrial worker finally got that bonus they had been waiting so long for. That worker now has a choice to spend that money on a brand new home theater system or a vacation to Cancun. If the worker were to choose the vacation, the trade-off would be no home theater system. Humans are faced with choices every day, and humans make different choices based on personal preference. It is these unpredictable human decisions that make the economy like a roller coaster, and why economists can’t always answer a question and still be right in the…show more content…
An example Wheelan uses that relates to the consumer is cheap foreign labor. If Nike were to hire workers in Vietnam as opposed to Maine to make shoes, consumers would be rewarded with lower prices on shoes because Vietnam workers will work for less than American workers. This change in price changes incentives of people to buy, and may make the difference between buying Skechers or Nike. “...individuals who claim to have the downtrodden at heart neglect the fact that cheap imports are good for low-income consumers (and for the rest of us) (Wheelan 195). Wheelan continues to say although it seems inhumane to have employees in sweatshops working for meager wages, it gives people jobs who otherwise may have no job at all. Also, lower prices are the equivalent of higher incomes. Wheelan also mentions that world trade opens the doors of domestic business to other countries which increases investment and business. Trade is one beautiful process. In conclusion, Wheelan strongly asserts the point that the economy is always changing, and factors like GDP and inflation will never stay the same. Since factors are variable, there is never a fixed answer for anything. The reason for this variability is humans are always changing things in accordance on their own best interest, or utility. Significant groups whose mercurial actions affect the economy
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