The Twisted Economy

I happen to have this bad habit of sitting through lectures for subjects I don't take, won't take, and don't care too much about. A good example of this would be third-year microeconomics at Melbourne Uni. The lecturer's name is in the photo. 316313microfunny.jpg

She gave this fun example called the Robinson Crusoe economy. Since I would think that the material should not be shared so happily, and I will take it down if told to do so, this is a funny way of looking at a one-man economy.

Simply said, it is an example of a one-man economy. How is it a funny, yet twisted example? This man is a producer, so he sets up a firm and hires labour to collect food, then sell it to the consumer. This man is also the consumer - so he is the labour of this firm and he buys food from the firm. So, now we have a man who sets up a firm to collect food, for which he does, and then he sells this food to himself with the money he was paid for the work (which could be food too). This man also happens to be a sole shareholder of the firm which produces food, so he also receives dividends off the profit of the firm. So now, we have a man collecting food for a firm who sells him food which he buys using his wage and his dividends which are from the profits of the firm who sells him food at a profit.

The easy way to look at it? This man looks for food. He eats the food when he needs the food. He will keep any extra food he has for later consumption.

So now, anyone for being an economist?

Edit: I've finally removed two links. Yam's Blog with Cogs has been taken down by Yam quite a while ago. I hoped he would bring it back up, which he didn't. The Speaker's Corner has been made private only by ayjk, the writer, and since I am not very interested in reading his blog, even I myself have not asked for access and I believe it isn't fair for me to link to something that most people can't read. Jien Han hasn't been updating his blog much either - so I'd say that if you want something to read, keep visiting my blog, chewxy's blog, u238's blog and kennysia's blog. (And yes, the links you see on the blog are the only blogs I visit regularly.)