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Are You Smarter than a Fifth Grader?


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Answer the following statements with either (a) strongly agree, (b) somewhat agree, © somewhat disagree, (d) strongly disagree or (e) are not sure.  Answer (E) if you feel the question is bias or possibly the subject of debate.  You may find it interesting to read the article pasted below AFTER answering the statements.

 

1) Mandatory licensing of professional services increases the prices of those services.

2) Overall, the standard of living is higher today than it was 30 years ago.

3) Rent control leads to housing shortages.

4) A company with the largest market share is a monopoly.

5) Third World workers working for American companies overseas are being exploited.

6) Free trade leads to unemployment.

7) Minimum wage laws raise unemployment.

8 ) Restrictions on housing development make housing less affordable.

 

 

 

 

http://online.wsj.com/article/SB10001424052748703561604575282190930932412.html?KEYWORDS=smarter+than+fifth

Are You Smarter Than a Fifth Grader?

Self-identified liberals and Democrats do badly on questions of basic economics.

Daniel Klein, professor of economics at George Mason University

 

Who is better informed about the policy choices facing the country—liberals, conservatives or libertarians? According to a Zogby International survey that I write about in the May issue of Econ Journal Watch, the answer is unequivocal: The left flunks Econ 101.

 

Zogby researcher Zeljka Buturovic and I considered the 4,835 respondents' (all American adults) answers to eight survey questions about basic economics. We also asked the respondents about their political leanings: progressive/very liberal; liberal; moderate; conservative; very conservative; and libertarian.

 

Rather than focusing on whether respondents answered a question correctly, we instead looked at whether they answered incorrectly. A response was counted as incorrect only if it was flatly unenlightened.

 

Consider one of the economic propositions in the December 2008 poll: "Restrictions on housing development make housing less affordable." People were asked if they: 1) strongly agree; 2) somewhat agree; 3) somewhat disagree; 4) strongly disagree; 5) are not sure.

 

Basic economics acknowledges that whatever redeeming features a restriction may have, it increases the cost of production and exchange, making goods and services less affordable. There may be exceptions to the general case, but they would be atypical.

 

Therefore, we counted as incorrect responses of "somewhat disagree" and "strongly disagree." This treatment gives leeway for those who think the question is ambiguous or half right and half wrong. They would likely answer "not sure," which we do not count as incorrect.

 

In this case, percentage of conservatives answering incorrectly was 22.3%, very conservatives 17.6% and libertarians 15.7%. But the percentage of progressive/very liberals answering incorrectly was 67.6% and liberals 60.1%. The pattern was not an anomaly.

 

The other questions were: 1) Mandatory licensing of professional services increases the prices of those services (unenlightened answer: disagree). 2) Overall, the standard of living is higher today than it was 30 years ago (unenlightened answer: disagree). 3) Rent control leads to housing shortages (unenlightened answer: disagree). 4) A company with the largest market share is a monopoly (unenlightened answer: agree). 5) Third World workers working for American companies overseas are being exploited (unenlightened answer: agree). 6) Free trade leads to unemployment (unenlightened answer: agree). 7) Minimum wage laws raise unemployment (unenlightened answer: disagree).

 

How did the six ideological groups do overall? Here they are, best to worst, with an average number of incorrect responses from 0 to 8: Very conservative, 1.30; Libertarian, 1.38; Conservative, 1.67; Moderate, 3.67; Liberal, 4.69; Progressive/very liberal, 5.26.

 

Americans in the first three categories do reasonably well. But the left has trouble squaring economic thinking with their political psychology, morals and aesthetics.

 

To be sure, none of the eight questions specifically challenge the political sensibilities of conservatives and libertarians. Still, not all of the eight questions are tied directly to left-wing concerns about inequality and redistribution. In particular, the questions about mandatory licensing, the standard of living, the definition of monopoly, and free trade do not specifically challenge leftist sensibilities.

 

Yet on every question the left did much worse. On the monopoly question, the portion of progressive/very liberals answering incorrectly (31%) was more than twice that of conservatives (13%) and more than four times that of libertarians (7%). On the question about living standards, the portion of progressive/very liberals answering incorrectly (61%) was more than four times that of conservatives (13%) and almost three times that of libertarians (21%).

 

The survey also asked about party affiliation. Those responding Democratic averaged 4.59 incorrect answers. Republicans averaged 1.61 incorrect, and Libertarians 1.26 incorrect.

 

Adam Smith described political economy as "a branch of the science of a statesman or legislator." Governmental power joined with wrongheadedness is something terrible, but all too common. Realizing that many of our leaders and their constituents are economically unenlightened sheds light on the troubles that surround us.

 

Mr. Klein is a professor of economics at George Mason University. This op-ed is based on an article published in the May 2010 issue of the journal he edits, Econ Journal Watch, a project sponsored by the American Institute for Economic Research. The article is at: http://econjwatch.org/articles/economic-enlightenment-in-relation-to-college-going-ideology-and-other-variables-a-zogby-survey-of-americans

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I answered all of those questions with "enlightened" answers; however, a few things:

 

1) I'm definitely more liberal than conservative

2) I know economics

3) Those questions were slanted

4) Although I answered disagree for 5. (I foresaw the economic thought behind the questions), I don't agree with my answer.  There are clear cases of exploitation by American companies of foreign employees.  So, without prefacing the question with a condition, I do not agree fully with the statement.  I do agree that foreign employees are better off than without any work or money.

5) Minimum wage laws may raise unemployment--that is easy to see; however, is everyone necessarily better off?  Is Y% unemployment at $X/hr better than M% unemployment at $Z/hr?  Exploitation can occur, and there is clear evidence of that right now.  For example, companies are breaking employment laws by accepting payment for internships. 

 

My thoughts on extreme free market economics are there will be lots of abuses and social problems if regulations and restrictions do not occur. 

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I answered all of those questions with "enlightened" answers; however, a few things:

 

1) I'm definitely more liberal than conservative

2) I know economics

3) Those questions were slanted

4) Although I answered disagree for 5. (I foresaw the economic thought behind the questions), I don't agree with my answer.  There are clear cases of exploitation by American companies of foreign employees.  So, without prefacing the question with a condition, I do not agree fully with the statement.  I do agree that foreign employees are better off than without any work or money.

5) Minimum wage laws may raise unemployment--that is easy to see; however, is everyone necessarily better off?  Is Y% unemployment at $X/hr better than M% unemployment at $Z/hr?  Exploitation can occur, and there is clear evidence of that right now.  For example, companies are breaking employment laws by accepting payment for internships. 

 

My thoughts on extreme free market economics are there will be lots of abuses and social problems if regulations and restrictions do not occur. 

 

 

I tend to do better associating with liberals than conservatives as well, only because I can stand a tolerant person with no understanding of economics, but I can't stand a religious-bible-thumping-bigoted-racist jerk even one that does understand economics. But I consider myself to be on the market-anarchist side of libertarian.  I too answered all questions correctly.  As for Q4, there are "clear cases" of almost everything you can think of, it isn't the norm though.  There are clear cases of cannibalism and satanic/ritual murder in the world, but most people don't do those things.  If there was a question "Are human beings satanic murdering cannibals?" I would answer strongly disagree.  For the most part the "enlightened" answer is correct.

 

--Eric

 

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It seems that you two easily pass the test of critical thinking.

 

I am particularly curious about number 6 "Free trade..."  Taken to its logical extreme where everyone in Canada and the US has full labour mobility it will make no difference.  It is only in the middle stages that there is a positive effect.

 

No employment  or housing laws leads to exploitation of all types.  Too much gov't intervention stifles economies.  Its just a matter of finding the sweet spot.

 

 

 

 

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I answered all of those questions with "enlightened" answers; however, a few things:

 

1) I'm definitely more liberal than conservative

2) I know economics

3) Those questions were slanted

4) Although I answered disagree for 5. (I foresaw the economic thought behind the questions), I don't agree with my answer.  There are clear cases of exploitation by American companies of foreign employees.  So, without prefacing the question with a condition, I do not agree fully with the statement.  I do agree that foreign employees are better off than without any work or money.

5) Minimum wage laws may raise unemployment--that is easy to see; however, is everyone necessarily better off?  Is Y% unemployment at $X/hr better than M% unemployment at $Z/hr?  Exploitation can occur, and there is clear evidence of that right now.  For example, companies are breaking employment laws by accepting payment for internships.  

 

My thoughts on extreme free market economics are there will be lots of abuses and social problems if regulations and restrictions do not occur.  

 

I think they tried to control for those who thought the question was bias by not counting E as an incorrect answer and telling that to the person ahead of time.

 

Either way, there of a few questions that there are no excuse for getting wrong (such as the monopoly question or the standard of living question).  And they attempted to structure the questions in a way such that regardless of whether or not you agreed with the policy in the statement, the statement is not asking if you agree with the policy, which may be a subject of debate, it is asking the economic response to the policy.  There was still an objective right or wrong answer provable from an economic perspective.

 

For instance, in the licensing question, regardless or whether or your liberal or conservative, or whether you think that professional licensing is good or bad on a whole, liberal and conservative economists would agree licensing would raise costs (it still may validly be argued that licensing is good, but failing to acknowledge limitations on supply will increase costs is ignoring reality).

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My thoughts on extreme free market economics are there will be lots of abuses and social problems if regulations and restrictions do not occur. 

 

I almost forgot to comment on this.  My thoughts about a statist system with the power to regulate is that there will be lots of abuses and social problems as the powerful people who control the system twist it to their own ends at the expense of the rest of us. Statist regulations in the real world protect large corporations from competition from small business and from being held liable for the damage that they may cause, that is all.  The way the system is set up that is all regulation will ever accomplish regardless of who you vote for.

 

How’s All That Progressive Regulatory Stuff Workin’ Out For Ya?

"... this is the most "progressive" president, with the largest Democratic majority, likely to be elected in a generation.  If this guy lacks the political will to make full use of the powers available to him in holding a dirtbag like Hayward accountable in a smoking gun case like this, what good's a regulatory state?...In the real world, government is a lot more apt to protect the corporations against you than vice versa."

 

And while BP is dumping god knows how much oil into the Gulf of Mexico every single day for months, with the government capping its liability at an astoundingly low amount, so-called regulators are going to allow them to increasingly pollute the great lakes too:

 

BP gets break on dumping in lake

"Under BP's new state water permit, the refinery -- already one of the largest polluters along the Great Lakes -- can release 54 percent more ammonia and 35 percent more sludge into Lake Michigan each day. Ammonia promotes algae blooms that can kill fish, while sludge is full of concentrated heavy metals."

 

Only the market can protect natural resources, government entities across the globe have always been the largest polluters of our planet.  The USSR was an environmental nightmare.  Even in this country the largest messes are the government's or done with government's OK and/or grants of protection from liability.

 

--Eric

 

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I answered all of those questions with "enlightened" answers; however, a few things:

 

1) I'm definitely more liberal than conservative

2) I know economics

3) Those questions were slanted

4) Although I answered disagree for 5. (I foresaw the economic thought behind the questions), I don't agree with my answer.  There are clear cases of exploitation by American companies of foreign employees.  So, without prefacing the question with a condition, I do not agree fully with the statement.  I do agree that foreign employees are better off than without any work or money.

5) Minimum wage laws may raise unemployment--that is easy to see; however, is everyone necessarily better off?  Is Y% unemployment at $X/hr better than M% unemployment at $Z/hr?  Exploitation can occur, and there is clear evidence of that right now.  For example, companies are breaking employment laws by accepting payment for internships.  

 

My thoughts on extreme free market economics are there will be lots of abuses and social problems if regulations and restrictions do not occur.  

 

Well said.

 

The answer to every question is it depends. I can show you both sides where the statements would be true or false, regardless of dogma. Would you really want an uncertified heart surgeon?

 

Some are slaves to government control and some are slaves to the trappings of a free market.

Either is a foolish move to me. Free market types forget that the economy is simply a means to an end, the end being quality of life and Human well being. If someone cant see the failures of both the Cowboy / crony capitalistic free market system (we have in place), and useless regulation / unwillingness to properly regulate business (we have this too) after BP and the Financial crisis then they are simply lost to one particular ideology.  

 

As Keynes said - "The ideas of economists and political philosophers, both when they are right and when they are wrong, are more powerful than is commonly understood. Indeed the world is ruled by little else. Practical men, who believe themselves to be quite exempt from any intellectual influence, are usually the slaves of some defunct economist."

 

Rothbard, Marx's, Rand, and Keynes are all useful to one degree or another, but whole hardly following one and refusing to examine the facts is a fools game.

 

----

 

And the market does nothing about externalities unless properly regulated. Check out China for great free market environmental examples. Its generally cheaper to destroy the earth then to properly conduct business. This is known as externalities. The only way to solve this is to tax or regulate, making it cheaper to protect the environment than to dump waste. Its hard to design regulation though when one side believes in total anarchy and blames government unless we try it completely. 1 side is misguided and 1 side completely crazy.

 

We both know the people installing these liability caps claim to want a completely unregulated free market.

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Well said.

 

The answer to every question is it depends. I can show you both sides where the statements would be true or false, regardless of dogma. Would you really want an certified heart surgeon?

 

 

Again, the questions weren't supposed to be do you agree or disagree with the policy.  I agree with the policy of having licensed heart surgeons.  However, I recognize that requiring licensing will increase the cost of heart surgery, as it restricts supply. 

 

The question in that instance is "Mandatory licensing of professional services increases the prices of those services."  I think you would have a pretty hard time arguing that by not allowing just anyone to perform heart surgery, the cost is higher. 

 

The questions are restricted to a specific economic impact, and determining how many people do not understand that impact.  I'm not trying to argue for or against licensing of heart surgeons; but it is undeniable that by restricting just anyone from becoming one, you restrict supply, and therefore increase cost.  Almost ANY economist, liberal or conservative, would agree with this statement.

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That is true, Watsa. But I also think you are going to get 100% judging by the quality and nature of this board. So I cant believe the point of this thread was for us to take that quiz there? It really couldn't have been the point.

 

--- I would prefer to discuss this, aspect listed below.

 

How did the six ideological groups do overall? Here they are, best to worst, with an average number of incorrect responses from 0 to 8: Very conservative, 1.30; Libertarian, 1.38; Conservative, 1.67; Moderate, 3.67; Liberal, 4.69; Progressive/very liberal, 5.26.

 

Americans in the first three categories do reasonably well. But the left has trouble squaring economic thinking with their political psychology, morals and aesthetics.

 

--- My thesis is the left is foolish because the right is deluded and has no economic principles.

 

They should educate our liberal friends, and practice what you they to preach.

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I could come up with a another whole set of questions on economics which would result in a different outcome. Try asking questions on regulation, taxes, deficits, govt. spending. Suddenly the libertarians and conservatives look like economic dunces and liberals are the geniuses. All this test and survey uncovers are political and philosphical biases.

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I would be interested in a quiz to see who understands externalities better... liberals or conservatives.

 

Totally free markets mean that the lowest cost producer of electricity will win... but that may not be the most efficient allocation of capital if the external costs of the pollution, when added to the cost of production, are taken into consideration.

 

It's not that complicated, but it's amazing how many conservatives don't seem to get it, clever as they think they are.

 

Does anyone disagree that my version of the test would show that conservatives are less likely to arrive at the "enlightened" answer?  Therefore, they don't get economics.

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I could come up with a another whole set of questions on economics which would result in a different outcome. Try asking questions on regulation, taxes, deficits, govt. spending. Suddenly the libertarians and conservatives look like economic dunces and liberals are the geniuses. All this test and survey uncovers are political and philosphical biases.

 

You posted this while I was still typing up my post.

 

You are exactly right IMO.

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That is true, Watsa. But I also think you are going to get 100% judging by the quality and nature of this board. So I cant believe the point of this thread was for us to take that quiz there? It really couldn't have been the point.

 

 

Well, I wasn't actually looking for people on this board to answer the questions and post answers here.  The point was to share a WSJ article I found interesting.

 

Personally, I am conservative economically and liberal on social issues.  However, this article confirms a personal experience I have with friends, where regardless of the issue, the more liberal leaning on economic issues seem to not grasp economic issues as strongly. 

 

For Instance, the question regarding is our standard of living higher today than 30 years ago.  I think this study confirms people with liberal economic tendencies do not seem to grasp the concept that, yes, in fact our standard of living is much higher than 30 years ago (think of all the technological innovations).  More liberals answered that wrong by a factor of 4:1.

 

Same with the monopoly question - that is pretty cut and dry.  If you don't know the answer to "A company with the largest market share is a monopoly," you shouldn't really be making decisions that affect the country, in my opinion.

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I would be interested in a quiz to see who understands externalities better... liberals or conservatives.

 

Totally free markets mean that the lowest cost producer of electricity will win... but that may not be the most efficient allocation of capital if the external costs of the pollution, when added to the cost of production, are taken into consideration.

 

It's not that complicated, but it's amazing how many conservatives don't seem to get it, clever as they think they are.

 

That's where the libertarians have an understanding of the real world that the liberals and conservatives are both out to lunch on.  The conservatives don't get it at all, as you pointed out, they don't even recognize that the problem exists. And the liberals don't realize that these problems are worse now then they would be under a free market, because it is the state that creates the problem to begin with.  Currently it is the state that limits the liability of large corporations and their owners.  Get rid of the concept of limited liability and of corporate personhood and the problem goes away.  Yes, I do realize that investing in stocks would become a bit more risky endeavor if the owners of a company could be held liable for the actions of said company.  This would have the advantage of discouraging blind speculating and thoughtless stock buying. If you are buying shares in a company you better know a good deal about what it is doing and if a company you own starts doing something risky you better either sell or become active with your fellow shareholders to stop it.  People want their profits without the liability, you can't have your cake and eat it too, this creates moral hazard which causes disasters (financial, medical, environmental, etc...).

I state again: neither conservatives nor liberals understand the issue of externalities (what causes them, what exacerbates them, how to mitigate them).

 

--Eric

 

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ERICOPOLY, I agree with your statement. Watsa the are you better off now than 30 years ago is fairly shocking. Very few groups are worse off. I cant really think of any off the top of my head, especially any that liberals usually support.

 

---

 

This is going to shock some of you. But I actually don't mind the liability cap. Working in the industry it makes sense. If you remove the cap then only the super majors can drill, and they likely wont due to insurance costs. Plus the cap goes out the window with criminal negligence. It should be raised though to around $1 billion. This is actually a piece of legislation that appears to be designed well. If BP is found criminally liable which they will be, it becomes a non issue.

 

Drilling should be heavily and sanely regulated (good regulations that are enforced), and the oil and gas tax should be raised. I believe they have a per barrel oil tax which goes into a fund to clean up these sorts of issues. Similar to deposit insurance for banks. This should be raised to generate a bigger fund, an actual super fund. This creates other externalities similar to banking, but Criminal Liability and actual prosecution of Executives why create an environment which leads to these types of things would very quickly alleviate those. Start with the guy at Massey Energy.

 

I think all the ideologies have good ideas, but the key players are a bit too dogmatic. The Republican party has also been taken over by people who have been captured by industry, believe in no regulation (the government is always the problem), or sadly both. I see a bit more realize on this issue with Obama and Kerry than anyone on the right.

 

Liberals are just as flawed but I find that they will listen to you. When you ask them would you rather - walk, drill offshore, use nuclear, use coal, or pay an obscene amount for solar - you can eventually reason with them. Very different than drill baby drill and no government regulation.

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Well said.

 

The answer to every question is it depends. I can show you both sides where the statements would be true or false, regardless of dogma. Would you really want an certified heart surgeon?

 

 

Again, the questions weren't supposed to be do you agree or disagree with the policy.  I agree with the policy of having licensed heart surgeons.  However, I recognize that requiring licensing will increase the cost of heart surgery, as it restricts supply.  

 

The question in that instance is "Mandatory licensing of professional services increases the prices of those services."  I think you would have a pretty hard time arguing that by not allowing just anyone to perform heart surgery, the cost is higher.  

 

The questions are restricted to a specific economic impact, and determining how many people do not understand that impact.  I'm not trying to argue for or against licensing of heart surgeons; but it is undeniable that by restricting just anyone from becoming one, you restrict supply, and therefore increase cost.  Almost ANY economist, liberal or conservative, would agree with this statement.

 

 

Has anyone on the board read The Constitution of Liberty or The

Road To Serfdom by F A Von Hayek or the Works of Milton Friedman?  To license or not to license and nothing more beyond that, may not be the way these economists would have approached the issue.   Occupational licensing has a downside beyond increasing the cost of services: a false sense that the holder of a license is necessarily competent.  Friedman makes a good case that occupational certification would be much more valuable to the public than mere licensure.  Occupational licenses do promise that the holder has met certain minimal standards when the license was issued, but the license is generally good for a lifetime, absent gross misconduct or incompetence, granting the holders of a license monopolistic privileges as a group.

 

Certification, and especially periodic recertification, offers greater information about competency than merely holding a license as well as potentially lower costs and better service.  :)

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I was looking towards reading Friedman, but opted not to. I watched probably 8 hours of video with him or about him instead and understand the basic idea of what he was getting at.

 

In one CSPAN interview he talked about license requirements and said he believed prices would come down for things like Taxis and Accounting services if we removed the certification requirements and let the market work. He believed people who did bad jobs would develop a reputation and be shunned by the market. People who did well would thrive, and more people would come to the industry due to the lack of certifications.

 

The false sense of security is interesting though and is something I see everyday in the accounting world. Continuing education helps a bit, but its always tough to gauge the quality of the options. With that said, I am very much apposed to re-certification from a purely selfish perspective. 1 set of tests is more enough.

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Has anyone on the board read The Constitution of Liberty or The

Road To Serfdom by F A Von Hayek or the Works of Milton Freeman?  To license or not to license may not be the question these economists would have sought to answer.  Occupational licensing has a downside beyond increasing the cost of services: a false sense that the holder of a license is competent.

 

I have not read that, but what you say makes sense.

 

A number of problems have been pointed out about this study:

http://www.fivethirtyeight.com/2010/06/are-you-smarter-than-george-mason.html

 

The two most telling questions to me are the standard of living question and the monopoly question.  I don't see how any of those are biased, and both 90% of students of a college econ course should be able to answer correctly.  This author complains that the question is confusing because it is a necessity but of a monopoly but not a sufficiency.  However, this is just a simply test of logic, almost like a gimme GMAT question (all monopolies have largest market share but not all companies with largest market shares are monopolies).  I resubmit my claim that those who do not have the intellect to answer a question this easy should not be influencing the policies of this nation.

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I resubmit my claim that those who do not have the intellect to answer a question this easy should not be influencing the policies of this nation.

 

Agreed.  We should disenfranchise millions of people based on a shitty quiz ginned up by Zogby and the WSJ.  Further, I think only white male landowners who can pass my own personal intelligence test should be allowed to vote.  Fuck the rabble, they're beneath us, and need to be herded.

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Again, the questions weren't supposed to be do you agree or disagree with the policy.  I agree with the policy of having licensed heart surgeons.  However, I recognize that requiring licensing will increase the cost of heart surgery, as it restricts supply. 

 

The question in that instance is "Mandatory licensing of professional services increases the prices of those services."  I think you would have a pretty hard time arguing that by not allowing just anyone to perform heart surgery, the cost is higher. 

 

Actually, the cost of heart surgery might well be higher WITHOUT mandatory licensing. Licensing lowers patients' costs of determining which surgeon is qualified enough to perform heart surgery and which one is simply an impostor. If there was no licensing, patients may feel compelled to pay up for the best surgeons -- those who have succeeded in building a "brand" for themselves.  The brand building process could result in surgeons' marketing expenditures being a lot higher than in a scenario in which licensing is required.  You could actually "restrict" supply without licensing because many of the folks claiming to be surgeons would not find any patients willing to take the risk.  You would have a partial breakdown of the market mechanism due to imperfect and asymmetric information.  Nobel Laureate George Ackerloff wrote an interesting paper that has a bit to do with this line of thinking -- I think it was called "The Market for Lemons," and it looked at the used car market.

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Ouch on Zarley's comment.  This is turning out to become a heated debate.  

 

I believe the right answer to these questions depends on the context.  Watsa, I understand your point that these questions are posed under the context of conventional economic thought in a standard Econ 101 class; however, is this necessarily the "right" answer?  I think that's what the rest of us are arguing.  

 

Regardless, thanks for bringing up a thought-provoking debate.  Some users brought up some points I had forgot about.  External costs, or societal costs, are very important.  It would be interesting to see how the political spectrum measures up in that regard.  

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The discussion on standard of living change interested me a bit. Seems like the expected answer is that it did increase from 30 years ago, mainly due to innovation in technology. But I wouldn't consider technology an integral part of standard of living consideration, certainly not in the same category as food, housing, and health care. 30 years ago is only as far as 1980. I tried looking up historical personal per capita income in the US, and just eyeballing it, it didn't seem to increase much at all, adjusting for inflation. Seems like some basic costs such as food and shelter have stayed flat as well, but some of the "quality of life" costs like education and health care increased a lot more, thus opening room for argument that the standard of living may have actually decreased. Am I missing something, or am I really dumber than the fifth grader?

 

http://bber.unm.edu/econ/us-pci.htm

http://en.wikipedia.org/wiki/Personal_income_in_the_United_States

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The discussion on standard of living change interested me a bit. Seems like the expected answer is that it did increase from 30 years ago, mainly due to innovation in technology. But I wouldn't consider technology an integral part of standard of living consideration, certainly not in the same category as food, housing, and health care. 30 years ago is only as far as 1980. I tried looking up historical personal per capita income in the US, and just eyeballing it, it didn't seem to increase much at all, adjusting for inflation. Seems like some basic costs such as food and shelter have stayed flat as well, but some of the "quality of life" costs like education and medicine increased a lot more, thus opening room for argument that the standard of living may have actually decreased. Am I missing something, or am I really dumber than the fifth grader?

 

http://bber.unm.edu/econ/us-pci.htm

http://en.wikipedia.org/wiki/Personal_income_in_the_United_States

 

No, I don't think you're missing anything.  This is a heavily debatable point, and it's one that I could see from a mile away.  I chose the "enlightened" answer on this one too because of the context.  The pundits will point out that medicine and life expectancy is much better now than it was 30 years ago.  They will say that technology has benefited society in drastic ways: cars are better, information technology is much better, electronics and gadgets, etc...  But, it's tough to claim a general statement that the standard of living has gotten much better.  I mean, that term is relative, right?  Does standard of living equal having more stuff and money, but working drastically more for it?  Productivity has been increasing by leaps and bounds in the U.S. and it's often looked as a good thing by policy makers; however, to everyone else it sucks (unless you're a workaholic). 

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