Mr.+SW

Welcome to Mr. SW's Macro Page. =__Unit 2 Concept:__= =[|Right Wing Misinterpretation of Laffer Curve]= The Laffer curve is often not known by folks and often misinterpreted by others. Above is a confessed conservation pointing out the obvious: it everything depends on where you are on the curve! [|Was Laffer Right?] However, perhaps Laffer wasn't even right? In fact, perhaps Laffer's curve is totally wrong in the first place? Uh-oh. So why does it matter? Because half the political spectrum believes very strongly that taxes should go down and the other half believes they should go up. "Their" evidence shows their believes. Laffer does matter!

**__Unit 1 Concept__**
Concept of //Comparative Advantage://

//This is a really cool concept! Here is the origin of this theory according to Wikipedia://

Comparative advantage was first described by [|David Ricardo] who explained it in his 1817 book //[|On the Principles of Political Economy and Taxation]// in an example involving England and Portugal.[|[][|4][|]] In Portugal it is possible to produce both [|wine] and [|cloth] with less labor than it would take to produce the same quantities in England. However the relative costs of producing those two goods are different in the two countries. In England it is very hard to produce wine, and only moderately difficult to produce cloth. In Portugal both are easy to produce. Therefore while it is cheaper to produce cloth in Portugal than England, it is cheaper still for Portugal to produce excess wine, and trade that for English cloth. Conversely England benefits from this trade because its cost for producing cloth has not changed but it can now get wine at a lower price, closer to the cost of cloth. The conclusion drawn is that each country can gain by specializing in the good where it has comparative advantage, and trading that good for the other.

//The point being that you can be less good (or suck) at making/doing two things and still be better off by making one item and trading for the other. Just when you think that one student in all your AP classes is the all-star in everything, you realize there is no WAY, according to this theory, that they can be the best at everything. Scarcity and limitations always set in so focusing on one class will always take away from your ability to excel in another. In other words, do the thing that YOU are best at, and trade for the others....and hope that others do something else well! In other words, go Zambia!//

1 pound of coffee ||  || 5 pounds of coffee ||  || 5 pounds of coffee ||  || 5 pounds of salmon ||  ||
 * |||||||||| Opportunity Costs and Efficiency  ||   ||
 * ||  ||  Before Specialization  ||  Hours Worked  ||||||  Production and Consumption  ||   ||
 * ||  ||  Alaskan  ||  4   4  |||||| 5 pounds of salmon
 * ||  ||  Brazilian  ||  4   4  |||||| 1 pound of salmon
 * ||  ||  After Specialization  ||  Hours Worked  ||  Production  ||||  Consumption  ||   ||
 * ||  ||  Alaskan  ||  8  ||  10 pounds of salmon  |||| 5 pounds of salmon
 * ||  ||  Brazilian  ||  8  ||  10 pounds of coffee  |||| 5 pounds of coffee
 * ||  |||||||||| Trade enables each Alaskan to consume an additional 4 pounds of coffee per day, and each Brazilian to consume an extra 4 pounds of fish per day. Each group specializes in the form of production in which it enjoys a comparative advantage, and Alaskans and Brazilians both gain from trade. ||   ||