Learning a lot in my economics class

Economics is by far my favorite class, especially because it’s also taught by one of my favorite teachers. It also lasts for two trimesters instead of one, so I get to take it for a longer amount of time. We covered basic economics in my history class last year, and I think it’s super interesting to learn about. There isn’t really any emotions involved, and it’s just pure fact. Plus it’s also paramount in business, which I’m going to study in college. If I’m going to be a successful business owner like my friend in Vegas, I’m going to have to know a lot. His short term rental special use permit business is super successful. So far we’ve learned about supply and demand, elastic demand, indirect taxes, and subsidies.

Looking at the graphs involved is really interesting. Sometimes it takes me a bit to understand them, but once I do, I really learn a lot more. In a basic supply and demand graph, the Y axis is always price and the X axis is always quantity. The supply and demand curves intersect to create an equilibrium point, which is supposed to be the perfect point for both producers and consumers. The demand curve is actually more of a straight line, where price decreases as the quantity increases. The supply curve is basically the opposite, where prices goes up as the quantity does as well. I’m still struggling a bit with elasticity, but I do know that the necessity of a product is key.

My notes state that “When demand is inelastic, the burden of the tax is paid by the consumers.” There are two types of indirect tax. There is a specific tax, which is linear and just attached to the quantity being sold. For example, $1 per unit no matter what the price of the unit is. More common in the real world is the self-explanatory percentage tax, which is just a percentage of the unit’s price. I’ll tell you guys more as I go along, but I’m only in like my third or fourth week so there’s no a whole lot that I know. We do have midterms coming up on Monday, however.