Disney World charges $140 for one round of golf from morning until 2:00 PM and $60 for one round of golf from 2:00 PM until closing. Suppose the marginal cost of one round is $20. a. What does this price differential suggest about the price sensitivities of people who play golf early in the day compared to those who play in the late afternoon? b. Calculate the price elasticity of demand for the early-morning golfers and the late-afternoon golfers.

OneClass: Disney World charges $140 for one round of golf from morning until 2:00 PM and $60 for one ...

What do you believe is the ultimate impact of technology on job creation? Should there be curbs to the pace of modernization?

(Answer in a paragraph(around 200 words))

What Econ 101 Can Teach Us About Artificial Intelligence

Here's why advancing technology often leads to more jobs for humans, not fewer

A Tesla Model X 75D semi-autonomous electric vehicle is parked at the Governor's Mansion in Olympia, Wash., this year. Goldman Sachs predicts that 25 years from now, driver employment will be growing by 300,000 less per year because of autonomous vehicles.

By Greg Ip

Aug 9, 2017

The first chart you draw in Economics 101 is the downward-sloping demand curve. It shows that when the price of something drops, people consume more of it.

This elementary rule of economics is remarkably helpful in discussing the effects of technological change. As I wrote last week, when technology makes something cheaper, we consume more of it, often by finding new uses. This lesson repeats through history: When coal-fueled steam power became more efficient in the 1800s, demand for steam power and coal spread. When automated teller machines made it cheaper to operate bank branches in the 1980s, banks opened more branches.

My column cites spreadsheet programs like Lotus 1-2-3, whose arrival in the early 1980s made repetitive recalculation vastly simpler and faster. This reduced demand for bookkeepers but created more demand for people who could run numbers in new and interesting ways, such as accountants and management consultants.

In a recent article for the Harvard Business Review, Ajay Agrawal, Joshua Gans and Avi Goldfarb, economists at the University of Toronto who study artificial intelligence, say that in the 1990s, economists didnât buy into the hype that the internet and the World Wide Web would upend everything:

âIt wasnât that we didnât recognize that something changed. It was that we recognized that the old economics lens remained useful for looking at the changes taking place. The economics of the âNew Economyâ could be described at a high level: Digital technology would cause a reduction in the cost of search and communication. This would lead to more search, more communication, and more activities that go together with search and communication. Thatâs essentially what happened.â

They apply that lesson to artificial intelligence and more specifically to machine learning, the use of powerful algorithms to make predictions from patterns in large quantities of data. Machine learning, they say, means many problems will be reframed as prediction problems. Autonomous driving no longer involves programming the car to respond in a certain way to a variety of controlled scenarios, but instead, to watch what humans actually do and then respond the same way.

How does this affect jobs? The authors says it depends on whether the technology competes with or complements what you do. Spreadsheets competed with what bookkeepers do (record keeping and calculation) and thus made them less valuable, but complemented what accountants and consultants do (analysis), and made them more valuable.

Mssrs. Agrawal, Gans and Goldfarb say that AI reduces the value of those who predict things for a living, such as whether a mark on an X-ray is a tumor, but it raises the value of those who use predictions to make judgments:

âWhen prediction is cheap, diagnosis will be more frequent and convenient, and thus weâll detect many more early-stage, treatable conditions. This will mean more decisions will be made about

medical treatment, which means greater demand for the application of ethics, and for emotional support, which are provided by humans.â

So AI will create winners and losers within and among industries and occupations. But what will the net effect be? More jobs or less, and for whom? This isnât knowable, but history suggests that while a specific occupation or industry may suffer losses, the aggregate effects will be positive. The growth in accounting and analytical jobs since the early 1980s is much larger than the loss of bookkeeping jobs.

Nor did all those bookkeepers necessarily lose jobs; many probably became accountants or analysts. As Mr. Gans told me, bookkeepers may have been best placed to exploit the capabilities of spreadsheets: âIf you were doing calculations all day as a bookkeeper, chances are you thought a bit about why you are doing that. When you got a spreadsheet, rather than doing one calculation per day you could do 10 to 50, so you had a better sense of what the [calculations] might say.â

Some readers said AI is a much bigger threat than spreadsheets because it has so many more potential applicationsâand they displace uniquely human abilities. I agree with the first part, less so with the second. I suspect workers in previous eras, whether they drove a horse and plow, handled a stock trade or connected a phone call, thought there was something about their job that a machine could never replace.

Will the disruptions this time around be greater? Maybe, but not necessarily. Goldman Sachs predicts that 25 years from now, driver employment will be growing by 300,000 less per year because of autonomous vehicles. Thatâs 25,000 jobs per month to make up, compared with the 5,000 per month that the decline in bookkeeping since 1985 represents. But itâs hardly insurmountable in a labor market where five million jobs are created and destroyed each month.

Others said I was ignoring the potential for rogue algorithms and robots to turn on us or strip us of our freedom.

The experts, of which I am not one, tell me AI is nowhere near that capability. (Before the robots can kill us they must first stop killing themselves.) And donât assume spreadsheets have been all benign. Excel may not have slain anyone Terminator-style, but it did help wound J.P. Morgan through its role in the âLondon Whaleâ trading disaster.

Which brings me to the final point. We should not confuse what technology enables us to do with how much better off it makes us. Spreadsheets enabled analysts to construct much more intricate forecasts of stock prices and the economy, but didnât make those forecasts any more accurate. AI may enable companies to better manage the risks of their products and actions, but those products and actions may not be more profitable. Many a CEO has wondered whether the money they spend on spreadsheet-wielding consultants yields any real value. Some day they may wonder the same thing about their AI-wielding consultants.

Read the closing case and post a substantive answer to question below

When the former World Bank economist Bingu wa Mutharika became president of the East African nation of Malawi in 2004, it seemed to be the beginning of a new age for one of the worldâs poorest countries. In land-locked Malawi, most of the population subsists on less than a dollar a day. Mutharika was their champion. He introduced a subsidy program for fertilizer to help poor farmers and gave them seeds. Agricultural output expanded, and the economy boomed, growing by 7 percent per year between 2005 and 2010. International donors loved him, and aid money started to pour in from the United Kingdom and the United States. By 2011, foreign aid was accounting for more than half of Malawiâs annual budget.In 2009, to no oneâs surprise, Mutharika was reelected president. Then things started to fall apart. Mutharika became increasingly dictatorial. He pushed aside the countryâs central bankers and ministers to take full con-trol of economic policy. He called himself âEconomist in Chief.â Critics at home were harassed and jailed. Independent newspapers were threat-ened. When a cable from the British ambassador describing Mutharika as âautocratic and intolerant of criticismâ was leaked, he expelled the British ambassador. Britain responded by freezing aid worth $550 million over four years. When police in mid-2011 killed 20 antigovernment protestors, other aid donors withdrew their support, including most significantly the United States. Mutharika told the donors they could go to hell. To com-pound matters, tobacco sales, which usually accounted for 60 percent of foreign currency revenues, plunged on diminishing international demand and the decreasing quality of the local product, which had been hurt by a persistive drought.By late 2011, Malawi was experiencing a full-blown foreign currency crisis. The International Monetary Fund urged Mutharika to devalue the kwacha, Malawiâs currency, to spur tobacco and tea exports. The kwacha was pegged to the U.S. dollar at 170 kwacha to the dollar. The IMF wanted Malawi to adopt an exchange rate of 280 kwacha to the dollar, which was closer to the black market exchange rate. Mutharika refused, arguing that this would cause price inflation and hurt Malawiâs poor. He also refused to meet with an IMF delegation, saying that the delegates were âtoo junior.â The IMF put a $79 million loan program it had with Malawi on hold, further exacerbating the foreign currency crisis. Malawi was in a tailspin.In early April 2012, Mutharika had a massive heart attack. He was rushed to the hospital in the capital Lilongwe, but ironically, the medicines that he needed were out of stockâthe hospital lacked the foreign cur-rency to buy them! Mutharika died. Despite considerable opposition from Mutharika supporters who wanted his brother to succeed him, Joyce Banda, the vice president, was sworn in as president. Although no one has stated this publicly, it seems clear that intense diplomatic pressure from the United Kingdom and United States persuaded Mutharikaâs supporters to relent. Once in power, Banda announced that Malawi would devalue the kwacha by 40 percent. For its part, the IMF unblocked its loan program, while foreign donors, including the UK and United States, stated that they would resume their programs.

1. Now that Malawiâs currency has been devalued, what do you think the economic consequences will be? Is this good for the economy?

ceruleanhamster645

Read the closing case and post a substantive answer to question below

When the former World Bank economist Bingu wa Mutharika became president of the East African nation of Malawi in 2004, it seemed to be the beginning of a new age for one of the worldâs poorest countries. In land-locked Malawi, most of the population subsists on less than a dollar a day. Mutharika was their champion. He introduced a subsidy program for fertilizer to help poor farmers and gave them seeds. Agricultural output expanded, and the economy boomed, growing by 7 percent per year between 2005 and 2010. International donors loved him, and aid money started to pour in from the United Kingdom and the United States. By 2011, foreign aid was accounting for more than half of Malawiâs annual budget.In 2009, to no oneâs surprise, Mutharika was reelected president. Then things started to fall apart. Mutharika became increasingly dictatorial. He pushed aside the countryâs central bankers and ministers to take full con-trol of economic policy. He called himself âEconomist in Chief.â Critics at home were harassed and jailed. Independent newspapers were threat-ened. When a cable from the British ambassador describing Mutharika as âautocratic and intolerant of criticismâ was leaked, he expelled the British ambassador. Britain responded by freezing aid worth $550 million over four years. When police in mid-2011 killed 20 antigovernment protestors, other aid donors withdrew their support, including most significantly the United States. Mutharika told the donors they could go to hell. To com-pound matters, tobacco sales, which usually accounted for 60 percent of foreign currency revenues, plunged on diminishing international demand and the decreasing quality of the local product, which had been hurt by a persistive drought.By late 2011, Malawi was experiencing a full-blown foreign currency crisis. The International Monetary Fund urged Mutharika to devalue the kwacha, Malawiâs currency, to spur tobacco and tea exports. The kwacha was pegged to the U.S. dollar at 170 kwacha to the dollar. The IMF wanted Malawi to adopt an exchange rate of 280 kwacha to the dollar, which was closer to the black market exchange rate. Mutharika refused, arguing that this would cause price inflation and hurt Malawiâs poor. He also refused to meet with an IMF delegation, saying that the delegates were âtoo junior.â The IMF put a $79 million loan program it had with Malawi on hold, further exacerbating the foreign currency crisis. Malawi was in a tailspin.In early April 2012, Mutharika had a massive heart attack. He was rushed to the hospital in the capital Lilongwe, but ironically, the medicines that he needed were out of stockâthe hospital lacked the foreign cur-rency to buy them! Mutharika died. Despite considerable opposition from Mutharika supporters who wanted his brother to succeed him, Joyce Banda, the vice president, was sworn in as president. Although no one has stated this publicly, it seems clear that intense diplomatic pressure from the United Kingdom and United States persuaded Mutharikaâs supporters to relent. Once in power, Banda announced that Malawi would devalue the kwacha by 40 percent. For its part, the IMF unblocked its loan program, while foreign donors, including the UK and United States, stated that they would resume their programs.

1. Now that Malawiâs currency has been devalued, what do you think the economic consequences will be? Is this good for the economy?

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