Chapter 26

I would give this chapter a 2.5 out of 3 because of the vast amount of terms and vocabulary in it. While I have heard some of the terms before it will be important to keep them all straight. On the most basic level there are the savers and the borrowers which allows the economy to grow substantially by paring the two types together. Borrowers can raise money through either the financial market or financial intermediaries. In the market stock can be sold for part ownership in a company and bonds can be sold purely for the saver to collect interest on. Banks and mutual funds serve as a middle ground for savers to lend out their money. Banks pay interest to the savers and then charge more interest on borrowers. Mutual funds buy a collection of stocks for a saver. Generally the higher the risk savers are willing to undertake the greater the payout they can receive.

Chapter 24

I would give this chapter a two out of three for difficulty because while it was simple to see some of the uses and shortcomings of the consumer price index, I will need practice with the calculation portion of it. I also can see the difference between the GDP deflator and the CPI. The CPI measures everything that consumers spend their money on while the GDP deflator measures the prices of good produced domestically. That's why in the case of the consumer the CPI is going to be a better general measure of the costs for different standards of living. Other than looking at the cost of living now we can use the CPI to compare it to the costs of living in previous years by accounting for inflation. CPI is very important to try and calculate correctly when using indexation.

Chapter 23

I would give this chapter a 1.5 out of 3 because while the majority of the content was easy to understand, I had a bit of trouble keeping track of all the different types of ways to measure GDP. Understanding what the GDP is was relatively simple. Of course there are many caveats and little things that it's important to remember about what the GDP does and doesn't measure. For instance selling a used car doesn't contribute to a nations GDP because it has already been purchased once and produced once. Welfare would be another example of something not used in measuring a country's GDP because the welfare isn't being exchanged for a good or service, unlike paying the salary of a government employee. The big idea about GDP is that it's a relatively good way to measure a countries prosperity and quality of life most of the time.

Chapter 18

I would give this chapter a 1.5 out of 3 for difficulty. This is because it has a lot of broader explanations of concepts which I find to be easier, but it also seemed to cover a lot about how different factors affect the supply, demand, and wages of labor. One fact they talked about that I found interesting was how both the amount of workers in the market and the average wage of workers in the market has gone up over the past four decades. Another interesting idea was the information put forth about immigration and how it affects the economy. Up until this point I have mostly stayed neutral about my opinion on immigration as I didn't know too many of the adverse or positive affects. As we progress through these chapters I will keep my eyes open to see what else the effects of it are.

Chapter 17

I would give this chapter a one out of three because it mostly dealt with concepts that we have talked about it previous chapters. It was also very logical in determining how firms would act, and how firms would want to act. While it mostly focused on duopolies, this thinking can be translated to any small number of firms. The dynamic between self interest conflicting with the interests of others was interesting. Members of a cartel both want to raise their own output, while keeping the output of the group as a whole, lower. The methods that are used to keep prices low were also interesting. Of course as a consumer I should mostly want business practices to be competitive, but it's still interesting seeing how firms interact nonetheless. The part about predatory pricing was also fun to read as I've always thought it was a very viable business strategy, but now I can see one way the smaller company could survive the price cuts.

Chapter 16

I would give this chapter a 1.5 out of 3 because it built on many of the previous concepts that we have already learnt. As the name might suggest, competitive monopolies take traits from both perfectly competitive markets and monopolistic markets. We were also introduced to oligopolies for the first time in this chapter, a market which appears to share many characteristics of a monopoly. In the short run competitive monopolies function more like a monopoly but in the long run they function more like a perfectly competitive market because of firms entering and exiting the market, causing economic profit to return to zero. Excess capacity relates to the output rule with monopolies because they don't operate at the efficient scale as to keep their price up. As we see towards the end of the chapter, evaluating and solving inefficiency that competitive monopolies create can be hard and nearly impossible.

Chapter 15

I would give this chapter a difficulty of 1.5. I thought that it seemed relatively simple and logical with its concepts and and it built a bit on what we had previously learned in other chapters. The chapter showed the social costs of monopolies and how they can arise. The three main reasons were from the government, from being a "natural monopoly", or from the less common monopoly based off of the control of resources. Monopolies can have a detriment to welfare and cause dead-weight loss however because of the price being higher than the socially efficient quantity. Monopolies can also be positive however in the sense that they increase the incentive for research and in the case of natural monopolies, can reduce prices for the consumer. If monopolies are well managed and regulated they can be positive sometimes but it's the government's job to ensure that this happens.