Some Economic Jokes...

The following are some economic jokes that are compiled from the Internet. Enjoy.

Source: http://netec.mcc.ac.uk/JokEc.html

• A mathematician, an accountant and an economist apply for the same job.
  The interviewer calls in the mathematician and asks "What do two plus two equal?" The mathematician replies "Four." The interviewer asks "Four, exactly?" The mathematician looks at the interviewer incredulously and says "Yes, four, exactly."
  Then the interviewer calls in the accountant and asks the same question "What do two plus two equal?" The accountant says "On average, four - give or take ten percent, but on average, four."
  Then the interviewer calls in the economist and poses the same question "What do two plus two equal?" The economist gets up, locks the door, closes the shade, sits down next to the interviewer and says "What do you want it to equal?"

• Lightbulb jokes

Q: How many Chicago School economists does it take to change a light bulb?
A: None. If the light bulb needed changing the market would have already done it.

Q: How many mainstream economists does it take to change a light bulb?
A1: Two. One to assume the existence of ladder and one to change the bulb.

A2: Two. One to assume the existence of latter and one to change the bulb.

Q: How many neo-classical economists does it take to change a light bulb? A: It depends on the wage rate.

Q: How many conservative economists does it take to change a light bulb?
A1: None. The darkness will cause the light bulb to change by itself.
A2: None. If it really needed changing, market forces would have caused it to happen.
A3: None. If the government would just leave it alone, it would screw itself in.
A4. None. "There is no need to change the light bulb. All the conditions for illumination are in place.
A5. None, because, look! It's getting brighter! It's definitely getting brighter !!!
A6. None; they're all waiting for the unseen hand of the market to correct the lighting disequilibrium.

Q:How many Keynesian economists does it takes to change a light bulb?
A:All. Because then you will generate employment, more consumption, dislocating the AD (agg. demand) to the right,...

Q: How many Trotskyists does it take to change a lightbulb? A: None. Smash it!
Q; How many central bank economists does it take to screw in a lightbulb? A: Just one -- he holds the lightbulb and the whole earth revolves around him.

Q:How many economists does it take to change a light bulb? A: Irrelevant - the light bulb's preferences are to be taken as given.

• Experienced economist and not so experienced economist are walking down the road. They get across shit lying on the asphalt.
  Experienced economist: "If you eat it I'll give you $20,000!" Not so experienced economist runs his optimization problem and figures out he's better off eating it so he does and collects money. Continuing along the same road they almost step into yet another shit. Not so experienced economist: "Now, if YOU eat this shit I'll give YOU $20,000." After evaluating the proposal experienced economist eats shit getting the money. They go on. Not so experienced economist starts thinking: "Listen, we both have the same amount of money we had before, but we both ate shit. I don't see us being better off." Experienced economist: "Well, that's true, but you overlooked the fact that we've been just involved in $40,000 of trade."

• Seven habits that help produce the anything-but-efficient markets that rule the world by Paul Krugman in Fortune.

1. Think short term. 2. Be greedy. 3. Believe in the greater fool 4. Run with the herd. 5. Overgeneralise 6. Be trendy 7. Play with other people's money

• Reproduced below is an Economist Joke that illustrates the separate facilities solution to an externality problem.

Three guys decide to play a round of golf: a priest, a psychologist, and an economist.
They get behind a *very* slow two-some, who, despite a caddy, are taking all day to line up their shots and four-putting every green, and so on. By the 8th hole, the three men are complaining loudly about the slow play ahead and swearing a blue streak, and so on. The priest says, "Holy Mary, I pray that they should take some lessons before they play again." The psychologist says, "I swear there are people that like to play golf slowly." The economist says, "I really didn't expect to spend this much time playing a round of golf."
By the 9th hole, they have had it with slow play, so the psychologist goes to the caddy and demands that they be allowed to play through. The caddy says O.K., but then explains that the two golfers are blind, that both are retired firemen who lost their eyesight saving people in a fire, and that explains their slow play, and would they please not swear and complain so loud.
The priest is mortified; he says, "Here I am a man of the cloth and I've been swearing at the slow play of two blind men." The psychologist is also mortified; he says, "Here I am a man trained to help others with their problems and I've been complaining about the slow play of two blind men."
The economist ponders the situation-finally he goes back to the caddy and says, "Listen, the next time could they play at night."
A physicist, a chemist and an economist are stranded on an island, with nothing to eat. A can of soup washes ashore. The physicist says, "Lets smash the can open with a rock." The chemist says, "Lets build a fire and heat the can first." The economist says, "Lets assume that we have a can-opener..."

Paul Samuelson

Source: http://www.sodahead.com/blog/54371/funny-but-true-to-life-economic-jokes/

• How Tax cuts work...

Let's put tax cuts in terms everyone can understand. Suppose that every day, ten men go out for dinner. The bill for all ten comes to $100 If they paid their bill the way we pay our taxes, it would go something like this: The first four men (the poorest) would pay nothing. The fifth would pay $1. The sixth would pay $3. The seventh $7. The eighth $12. The ninth $18. The tenth man (the richest) would pay $59.

So, that's what they decided to do. The ten men ate dinner in the restaurant every day and seemed quite happy with the arrangement -- until one day, when the owner threw them a curve. "Since you are all such good customers," he said, "I'm going to reduce the cost of your daily meal by $20." So, now dinner for the ten only cost $80. The group still wanted to pay their bill the way we pay our taxes. So, the first four men were unaffected. They would still eat for free. But what about the other six, the paying customers? How could they divvy up the $20 windfall so that everyone would get his 'fair share'? The six men realized that $20 divided by six is $3.33. But if they subtracted that from everybody's share, then the fifth man and the sixth man would each end up being 'PAID' to eat their meal. So, the restaurant owner suggested that it would be fair to reduce each man's bill by roughly the same amount, and he proceeded to work out the amounts each should pay.

And so: The fifth man, like the first four, now paid nothing (100% savings). The sixth now paid $2 instead of $3 (33% savings). The seventh now paid $5 instead of $7 (28% savings). The eighth now paid $9 instead of $12 (25% savings). The ninth now paid $14 instead of $18 (22% savings). The tenth now paid $49 instead of $59 (16% savings). Each of the six was better off than before. And the first four continued to eat for free. But once outside the restaurant, the men began to compare their savings. "I only got a dollar out of the $20," declared the sixth man. He pointed to the tenth man "but he got $10!" "Yeah, that's right," exclaimed the fifth man. "I only saved a dollar, too. It's unfair that he got ten times more than me!" "That's true!!" shouted the seventh man. "Why should he get $10 back when I got only $2? The wealthy get all the breaks!" "Wait a minute," yelled the first four men in unison. "We didn't get anything at all. The system exploits the poor!" The nine men surrounded the tenth and beat him up. The next night the tenth man didn't show up for dinner, so the nine sat down and ate without him. But when it came time to pay the bill, they discovered something important. They didn't have enough money between all of them for even half of the bill! And that, boys and girls, journalists and college professors, is how our tax system works. The people who pay the highest taxes get the most benefit from a tax reduction. Tax them too much, attack them for being wealthy, and they just may not show up at the table anymore.

That's all for now.

Post By: Yuen Kit Kuan

Photos that illustrate economic concepts

Hi, there is a website which contains some photos 'depicting scenes we'll likely never see in the real world'. You can use them to learn about economic concepts. Enjoy! Click on the link below to look at more photos.

Source: http://www.econoclass.com/whatswrongwithpicture.html
Author: Lori Alden

Photo #1:


Concept: Public good. What's wrong with this picture? Sunsets are a non-excludable good, in that non-payers can't be prevented from enjoying them. Other examples of non-excludable goods are national defense, fireworks, and lighthouses. Private firms tend to underproduce non-excludable goods because customers have little incentive to pay for them. Public goods are both non-excludable and non-rival.

Photo #2:



Concept: Opportunity cost What's wrong with this picture? Most of the homes on this lakefront are expensive and built close to each other, so it's likely that the lakefront lots are highly valued. This, in turn, suggests that the opportunity cost of living in the shack is high. We rarely see shacks on expensive lots because the owners usually conclude that they'd do better by selling their property and buying a nicer house on a less desirable lot.

Photo #3:


Concept: Economies of scale What's wrong with this picture? It's hard to imagine that Mark and Sally will make a profit with their business. Suppose a customer asks them to deliver a small package to a city 200 miles away. Unless they have many other packages going to the same city, they'd have to charge a lot just to cover their variable costs--labor, gas, and depreciation. They wouldn't be able to compete against companies like UPS and FedEx, which can keep their costs down by handling a huge volume of parcels.

Photo #4:



Concepts: Equilibrium, law of one price. What's wrong with this picture? The more expensive gas station probably won't get many customers and will be forced to lower its prices. The Law of One Price says that identical goods in efficient markets must have only one price in equilibrium.

Photo #5:



Concept: Equilibrium. What's wrong with this picture? This is too good to be true. Since a business can get all the inexperienced home typists it wants at a much lower wage, it makes no sense for it to offer $40-$100 an hour.

Photo #6:



Concepts: Incentives, adverse selection and moral hazard. What's Wrong with this Picture? Adverse selection suggests that speeders will be more likely to sign up for this kind of insurance, while moral hazard suggests they'll have little incentive to slow down once they're insured. Both of these problems mean that the insurance company would have to pay out a lot of claims. The problems of adverse selection and moral hazard plague many insurance markets.

Photo #7:



Concept: Opportunity cost, comparative advantage What's wrong with this picture? It's nice of Superman to rescue a kitten, but has he considered the opportunity cost of doing so? Rescuing kittens is so easy that children often do it. With all the accidents, crimes, and natural disasters that occur in the world, surely he could spend his time more productively. The concept of comparative advantage suggests that Superman should focus on tasks that others can't do well, like stopping runaway trains or transporting nuclear weapons into deep space so they can detonate safely.

Photo #8:



Concepts: elasticity, price discrimination What's wrong with this picture? You'd think that movie theaters would charge students and children more than adults, since kids are more likely to spill popcorn and make noise. But theater owners know they can earn more revenue by charging students and children less. The reason is that kids are more price sensitive (in economic terms, they have a higher price elasticity of demand), and therefore less likely to come to the movies if the prices are high. The practice of charging price sensitive customers less is called price discrimination.

Photo #9:




Concept: Law of diminishing marginal utility (or benefit) What's wrong with this picture? It's not just the calories--a Big Mac with supersized fries has more. The law of diminishing marginal utility says that as a person increases consumption of a good, holding consumption of other goods constant, the marginal utility he or she gets from each additional unit of that good declines. This suggests that the marginal utility of the second egg will be smaller than that of the first, and the marginal utility of the third will be smaller still. For most people, the marginal utility of the tenth egg would likely be negative.

Photo #10:



Concept: comparative advantage, absolute advantage What's wrong with this picture? The man and the boy would probably get done more quickly if they switched chores. This isn't because the father can mow the lawn faster, since it's likely that he can mow AND sweep faster (i.e., he has an absolute advantage in both chores). They should switch since the boy likely has a comparative advantage in sweeping the driveway, while the man has one in mowing the lawn.

:)anGELA Lee