Freakonomics: Book Review Assignment

Chapter 1:

An incentive is an action made with choosing an alternate or a decision that is suitable to them. Like a $3 sin tax on cigarettes, the decision to still buy the cigarettes is the customers' choice and the government is the enforcer. With the study of the daycare in Israeli when the owners' charged a $3 late fee, most parents were not affected, but what if the late fee was almost tripled. Leaving the parents having to pay roughly $400 with the $3 late fee, but if tripled their bill would roughly be $600 or more. What if people were being paid to donate blood, this would create an incentive due to dishonest people doing anything for the money, such as using other types of blood or not using suitable blood. The school teacher can change the student's score and be rewarded if their improvement, but those students did not learn anything that was changed. The sumo wrestlers can be on the better half of the rank and treated like royalty but the ones on the lower rank are treated like trash. Incentive relates to the study of economics because the enforcer makes the decision for the ones below them. The enforcer can make can changes to benefit them and not others.

Chapter 2:

Withholding information of a car that is being sold is an information asymmetry; it makes the buyer look as though he is withholding information which makes the seller want to take his money elsewhere. The internet kills information asymmetry because it provides the other party with the manufacturers' prices; the internet allows the buyer to pay a reasonable price. Another example of information asymmetry is when a person sells their home they have to fear their Real-Estate Agent. A Real-Estate Agent can only lose hundreds when the home owner can lose thousands, but the Real-Estate Agent can make her loss of money back with her commission. When fear is introduced it causes it pressures a person to do something that they don't think is the right thing. The family man might have his surgery for his children, so he can grow old and see his children graduate from High School. The family man won't do the right thing for himself but he will do it for others because he thinks it the right thing.

Chapter 3:

When the invention of better and cheaper production is introduced it increases the net worth of a product such as Listerine. At first Listerine was being used for surgical purposes, then a cure for gonorrhea, and now for bad breath. Good marketing ads can increase the sale of a good, by making sure the product is affordable for anybody of any income. When you advertise a product with a negative (halitosis) with a positive effect (Listerine), good advertisement and reasonable prices can take a net worth from for example $115,000 to $8 million. When good marketing is added it can make people want to have or go try the product. Rock stars that are getting high off f cocaine are just like marketing ads, so people of all incomes want to do the same as celebrity. When crack cocaine was introduced it was made for low income users to experience cocaine without paying an expensive price, they could experience a high that was short and it kept first-time users coming back. The rock stars and athletes are the influencers or marketing ads for crack cocaine even when most don't smoke it. When nylon stockings were invented it gave American women the opportunity to afford nylon stockings but they weren't expensive or limited like silk stockings, with nylon stockings being cheaper than silk stockings it increased the sale of the good. With better and cheaper production the price is less, the sale of a good is increased and the service is just as good as the product itself or that it's imitating to be.

Chapter 4:

The explanation that the authors provides are some of these children were unwanted fetuses, or even when a strong economy comes along, that's what happen in the '90s. "Economy was a hammer that helped beat down crime," the authors make you look at the data showing that unemployment was at a lower so there was no need to commit crimes. With unemployment being low "nonviolent crime, meanwhile, fell by roughly 40 percent." Even though unemployment was low and nonviolent crimes fell, there was "no link between the economy and violent crime." This evidence is all connected but can't be pushed into the same circle, if you link the crime causes by drugs and gun violence then they belong in the same circle. While one the other hand if you put a good economy and lower unemployment rates they are in the same circle too. If you push the four examples in the same then it describes the '90s, it does because once the crack epidemic ended violence kind of lowered and unemployment did the same. When the crack epidemic ended a lot of the violence connected with did too, no more killing over turf or crack heads robbing store for a few dollars. The ending of this epidemic brought along police paying for you to sell your guns, the thought about law-abiding citizens