101 lecture 19 earnings and discrimination

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101 lecture 19 earnings and discrimination

  1. 1. Next Exam ! Exam 6 Thursday December 26 ! Chapters 18, 19, 20 and 21
  2. 2. Microeconomics Lecture 19 ! Earnings and Discrimination
  3. 3. Wage Gap Education Experience Preferences
  4. 4. Discrimination is Expensive
  5. 5. Median Household Income $70,000 $52,500 $35,000 $17,500 $0 Black White Asian Hispanic
  6. 6. Compensating Differentials 95% of job-related deaths are men.
  7. 7. America’s 10 Most Dangerous Jobs Average Fishing Logging Pilot Farm & Ranch Roofers Ironworkers Sanitation Machinist Truck Driver Construction Per 100,000 3.3 200 62 57 36 35 30 25 19 18 18 Source: Bureau of Labor
  8. 8. bits and atoms
  9. 9. atoms the physical universe mass and energy 2 e = mc always with us cannot create or destroy
  10. 10. bits digital computer technology ones and zeros binary digits or bits software ideas intelligence intellectual
  11. 11. creativity how we combine bits and atoms in new ways ! adding more bits to atoms
  12. 12. ideas human thought inventions inventors developing ideas innovations entrepreneurs successfully marketing inventions
  13. 13. China U.S. Manufacturing 2.5 billion 2.0 billion Workers 100 million 12 million Output per worker $25,000 $167,000
  14. 14. Output per Person $180,000 $135,000 $90,000 $45,000 $0 China U.S.
  15. 15. Innovation - Productivity
  16. 16. Continuous Innovation
  17. 17. ideas People have ideas inventions innovations Inventors convert ideas to inventions Entrepreneurs convert inventions to innovations
  18. 18. inventions Less than 10 percent of inventions go to market go to market Less than 10 percent of inventions that go to market are economically successful $ Less than one percent of inventions are economically successful
  19. 19. ideas innovation
  20. 20. Intellectual Human Entrepreneur Culture Financial Physical
  21. 21. idea discover Experimenting create observe
  22. 22. Cultural Capital trust values institutions infrastructure rules property rights rule of law taxes regulations stable currency mobility
  23. 23. Human Capital trust knowledge skills personality health relationships growing human capital learning new things education reading watching listening doing
  24. 24. Physical Capital natural resources atoms energy time buildings equipment tools
  25. 25. Intellectual Capital ideas methods technology recipes ways to do things research and development publishing
  26. 26. Financial Capital savings = investment connecting savers and borrowers investors and entrepreneurs money and risk time is money n (1+r) limited liability corporations insurance  
  27. 27. Entrepreneurial Activity looking for opportunity alert capture value create value take risk
  28. 28. “There are no entrepreneurs without capital.” Capitalism, Socialism and Democracy ! Joseph Schumpeter (1883 - 1950) Creative Destruction ! Innovation and Entrepreneurship
  29. 29. Intellectual Human Entrepreneur Culture Financial Physical

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