WWII Propaganda Posters

The first poster tells consumers to conserve materials because "waste helps the enemy." By decreasing demand for citizens on materials, the supply of the military will increase. The second poster tells consumers to use less gas by carpooling because "when you ride alone you ride with Hitler." If citizens decrease their gas supply, the military can have more gas. The third poster tells people that the world can't be half slave and half free; this poster appeals to American principles and ideals and tries to get people to enlist in the military. The fourth poster tells people to pay no more than the price of rationed goods and also to not accept free rationed goods. This is an attempt to protect America from inflation by keeping equilibrium price steady.

I can see what these posters are trying to do to people but could the people in the 1940s? Did they recognize that these posters were trying to help them? Also who made these posters? Did the government or did private businesses and companies or a mix of the two? And finally, did these posters work? Did the propaganda work and is there data to support this?

We looked at WWII propaganda posters because they show economic principles of supply and demand where we try and increase military goods while rationing civilians'.

Defying Gravity and the Law of Supply

There is probably some elasticity rule or other factor of supply curves that I haven't realized yet but I may have found something defies the law of supply.

Supply curves show that as price increases, there is more production and more quantity supplied. Supply curves slope up due to the law of diminishing returns - its harder to make more/cheaper goods after the first set of goods.

However, I had my OBOC (Off Broadway On Campus) show this weekend and we ordered shirts with a 4 colored print of "Defying Gravity" (a Wicked song). The shirts cost each person $17 and costed the producer some price to make. But here's the thing with tshirt prints. It costs MORE to make that first tshirt. After the print is made for that first shirt, the price decreases for each shirt produced - it's easier to make tshirts. This defies the law of diminishing returns.

So when the quantity supplied increases, the price actually decreases for the producer. This doesn't follow the Law Of Supply!

Again I may be missing some factor or law of elasticity, but do printed tshirts defy the law of supply and diminishing returns?

Class 33 - Kidneys! Kidneys! Getcha Kidneys Right Here!

Market economies goal = get goods to people who value them the most.

Price system
-ration by price system = people decide/ration for themselves = economize
-prices = consumers look at values and tradeoffs

Can healthcare be independent of consumer characteristics?
-equal access = coin flip chance
-illegal to sell kidneys = higher marginal value on a kidney

transactions = money changes the nature of a transaction
-batering is ineffiecient - hard to find people to barter with
-prices allocate goods - assign values to goods (lowers transaction costs)

Class 32 - Rationing Mechanisms - Not Fair

The challenge we are dealing with is scarcity. We use the price system to ration scarce goods. The costs are opportunity costs and they are what other consumers are willing to pay for a product is a cost for the producer.

Rationing Mechanisms:

1. Need - neediest gets it first. This seems very appealing but it's too vague. Who determines need levels?

2. Queues - first come first serve. This is the most costly. The length of the line = price/cost

3. Lottery - fairest. However, the people who value/need it more might not get the good. Basketball lottery isn't fair. In 2007 the Celtics were the 2nd worse team but got the 5th pick in the draft because of the lottery and didn't get Kevin Durant for this reason.

4. Equal shares - communism. Cutting up makes some things worth nothing and not all parts/time cut up aren't worth the same.

5. Force/Kicking Ass/Might Makes Right - costly. You can't plan and it's not fair - same people never win

6. Merit - good moral connotations but hard to say who earns merit


Evaluation Rationing Mechanisms:

Competition comes from scarcity.

1. What is the nature of competition?
-is it destructive or constructive?
-price system is the only one not destructive.
-when people focus on competition they don't focus on other things
      -but with the price system - competition focuses people on productive benefits

Class 31 - Supply!

Supply
Each point on the curve: the cost of producing a unit. Price increases = more production = more quantity supplied (it costs more to make more).

Supply curves slope UP!
-This is because of the law of diminishing returns - its harder to make more/cheaper to grow the first 10 acres of corn than the next 10 (more fertilizer/water)
-Other factors - other factors that have law of diminishing returns

What changes supply?
-Price of the good changes as you move along the existing supply curve. Change in supply shifts curve.

-changes in factor (input) prices
-expectations
-technology
-changes in other markets
-elasticity

Price Elasticity of Supply - How much more will I produce when the price goes up?
m = %change in quantity supplied / %change in price of good