Common Sense Economics Paper Essay

With the novel developments in the economy there could have not been a break away time to pick up this book and read it. I figure out for a financial institution which had received a good come of TARP funds. This was followed by media on the companys allocation of resources for what appears to be a recreational purchase equaling almost the amount of TARP funding. In turn to find out company x had decided that employees pass on not be receiving a compensation increase this year. After vindicatory the first couple of pages I already k forward-looking I wanted to come down in to the first part of the book discussing the Ten Key Elements of Economics. This direct call downed my interest to the first two attain elements that Incentives matter and There is no such thing as a free lunch. There ar many thoughts that came to mind while reading along.The incentive for employees was the annual compensation increase. The problem we ar facing now is that the labor and productivity su pplied are expected to be maintained, while people need to do more than with less. As the book explains, it takes time to adjust. However one may designate that the incentive has changed. Now as the economy has faux pased and the company has to make cipher and staff cuts the individual incentive has shifted to maintaining employment. Thus there is no lasting an increasing financial incentive, with the exception of the existing financial compensation. We must mark that incentives matter, but also that at the same time they can shift based on the factors providing the incentive. The book examines the increase and decrease in gaseous state prices. Consumers responded by changing their behavior, consequently shifting incentives.The cutbacks of company x leads in force(p) into the element that There is no Such Thing as a Free Lunch. The compensation for the service we yield now is allocated elsewhere. By decision making to stay employed with company x we have employment. Then again if we chose not to remain employed it volition cost us the potential drop income that could have been earned, so no free lunch. This also makes me consider key element number seven People Earn Income by component Others. Nonetheless what happens to the incentive of providing early(a)s with valuable goods and services now? With the lack of appreciation the shift in incentive I feel the employees pull up stakes only if care about their personal desires. Their interest to improve can consequent in lower productivity standards, or the search for a new employer. Considering the company standpoint inefficient workers will find other more personally beneficial opportunities. Cited as one of the reasons for reduced productivity of labor. The employees will provide less valuable service as the company shekels will continue to decline.By changing the ways of how the company ope considers and the rate of compensation it forces employees to focus even more on their self-interest . Now when presented with work, they will find the most efficient way of service. This in turn goes along with economic progress along with the chastise amount of government noise as discussed in the later part of the book. This can potentially work areas for new employment opportunities, and advancement of the nation as a whole. any company can bring their numbers back into the black with the correct allocation of the resources and capital. But also with new innovative ways to provide services and goods.With the responsible people in the right positions and the people with a controling of economic interactions self-interest will lead to a golden nation. In conclusion all the above tie into each other as well as the remainder of the book. Unfortunately self-interest with voraciousness and lack of knowledge leads many of us to make imprudent decisions. I knew that incentives matter, but I also understand now that incentives can shift. With the shift in incentives and the self- interest we can grow prosperous. Yet we must understand the interaction and effects of economics as a whole for the littler as well as the big picture. The book should be necessitate reading for all that want the privilege of voting. I will be thinking not only of the one side of the economic distribute but the other as well, and so should everyone else.