Friday, January 6, 2012

Important graph for teachers and students...There are many reasons for income inequality. However, I believe THIS graph illustrates a MAJOR underlying reason for it...Think about it...

It may be more helpful to just look at the numbers below the graph to see what is going on. 

There is lots of talk about income inequality and where it stems from...I think most reasons cited are way off base.  I believe THIS ONE is a major source of it but the least talked about. 

Education (college/community college/trade school, etc) is the key to (1) a better standard of living (materially and intellectually), and (2) the likely-hood of staying gainfully employed  thoughout your life. 

Nothing is guaranteed, but education is becoming like insurance in many ways.  We hate to pay for it but it sure comes in handy when you need it...or something like that.

Source: Matthew Iglesias

Thursday, January 5, 2012

Nice graphic showing 50% of the worlds 1%'ers are Americans. What may surprise you is the amount of income needed to make it into this exclusive club.

Source: CNN Money
It is amazing how little income (from an Americans perspective) it takes to be a part of the vaunted 1% world-wide--this is a teachers salary! (keep in mind it notes income AFTER taxes):

""It only takes $34,000 a year, after taxes, to be among the richest 1% in the world. That's for each person living under the same roof, including children. (So a family of four, for example, needs to make $136,000.)""
Source: CNN Money

Monday, January 2, 2012

Today is National Buffet Day AND Kim Jong-un has called for the people of NK to form a "human shield "around him. I think these 2 events are related...

"" North Korea called on its people to rally behind new leader Kim Jong-un and protect him as "human shields" while working to solve the "burning issue" of food shortages by upholding the policies of his late father, Kim Jong-il.""North Korea calls for "human shields" to protect new leader
Is the "Human Sheild" idea just a clever way for him to keep others out of the Buffet line?  Just askin'...

From the photos below, I would suggest he start by eating less so the people can eat more...Just sayin'.

Sunday, January 1, 2012

I have planted many a golf ball in a corn field but have not planted much corn on a golf course. See here WHY Iowa farmers are doing just that. How do you say "FORE!" in corn lingo??

A nice article in the NYTIMES today about farmers in Iowa  using every bit of land they can to grow crops, even land that previously had been deemed not worthy of cultivation.  This is an excellent example of increasing opportunity costs as it related to the Production Possibilities Frontier:

"Across much of the Midwest the sharp increase in farm earnings has driven the price of farmland to previously unimaginable — and, some say, unsustainable — levels. But in the process, to much less fanfare, the financial rewards have also encouraged farmers to put ever more land into production, including parcels that until recently were too small or too poor in quality to warrant a second glance."     
Most of the land they currently grow crops on could be labeled "low hanging fruit" which means that relatively little, other than the basics to cultivate, plant, maintain, has to be done to harvest the crop.  It is the most suitable land for growing crops.  However, this fertile land is not unlimited and "at the margins" of the acreage land is going to become less suitable, hence more expensive to convert to growing crops. 

The "opportunity cost" (explicit and implicit costs) of converting this land to grow food is too high relative to (1) the price they might receive for any food grown on it, or (2) an alternative use this land might have may be more suitable for the production of some other good:

A splash of green on a solid beige horizon, the golf course at the edge of this tiny town promised residents nine modest holes of refuge from corn country. Decades earlier the spot had been farmed, too, but the rocky soil was so poor, the saying went, that you couldn’t raise hell there with a fifth of whiskey.         
“The rottenest piece of land there is,” said Mick Elbert, a local car dealer who served on the golf association board. “All it is good for is a golf course. That’s why we built it there.” As Crop Prices Soar, Iowa Farms Add Acreage
Now that there appears to be sustained higher prices for various agricultural commodities, farmers and the communities they live in,  are willing and able to spend additional money and resources (equipment, time, etc) to cultivate this less suitable land because the opportunity cost of NOT doing so (foregone profit for farming relative to the profit, or lack there of, for the golf course) is now greater. 

""But this year, over a chorus of objections, the greens and fairways were plowed under. The course had been losing money, and crop prices had been breaking records, so the new owner did the type of quick calculation that is quietly reshaping the region and determined that it was more valuable as farmland. The first harvest took place this fall..."
For extra credit, draw a Production Possibilities Frontier showing the production of only two goods, Food and Golf Courses.  Show on the graph the result of the landowners decision about what to do with his land ("resource").  Explain why you drew your PPF curve the way you did (straight line or bowed). 

Read the whole article below the fold:

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