On October 23rd, I attended the Faculty lecture held by Nancy Roberts at 3pm in BA116. Dr. Roberts earned her Bachelor's Degree in Mathematics from the University of Texas, and her M.S. and Ph.D. in Economics from Arizona State University. The purpose of this lecture was to inform the students of W.P. Carey about the importance of economics. To briefly summarize Nancy Robert’s lecture, she defined what economics is and the two most important concepts of economics that economists have to think about before making decisions. Economics is defined as the study of efficiently allocating scarce resources, as well as studying things for the way they are and not the what we want things to be. It is therefore demanded from economists that they think with their head instead of their heart. They must value …show more content…
This is evident in the simple supply and demand graph; as price goes up, supply will increase as more suppliers will be willing to supply at a high price, but the demand will decrease due to the high price, causing a surplus of products. A real life example would be the milk industry in the United States, where governments put a price floor above the equilibrium price to support the suppliers, causing a great surplus of dairy products. Another example is the San Francisco Earthquake in 1987, after the disaster the demand for bottled water increased drastically, causing a right shift of the demand curve in the market of water, however the supply of bottled water also decreased due to damaged pipes, therefore the price of bottled water increased. Many other suppliers may sell bottled water at that time with a very high price, this is called price gouging. High prices often does two things that benefits the economy, one is that it encourages the consumer to conserve the product and not waste it, the other is that it encourages suppliers to supply when a product is