Economics 349 Progress Report

So far, I like Professor Imazeki's class: Economics 349 - Economics for Teachers.

I like the concept of having a class designed around teaching future teachers concepts in economics because I may end up teaching an economics class in the future. Since my major is Social Science - Single Subject, I must be prepared to teach in the following subjects: history, political science, geography, and economics. Economics was never one of my strongest subject areas. But with the help of Professor Imazeki and her class, I think I'm gaining a clearer understanding of economic principles and how to teach them to a class of students.

On Monday, we went over externalities. I have to admit, that I couldn't quite remember what exernalities were and I was afraid to raise my hand in class. But once Professor Imazeki went over some examples of externalities, I finally remembered what it was. I remembered them being like "extra costs." The example we went over in class was the production of cashmere sweaters and dust clouds. Here in the United States, we purchase cashmere sweaters from China. Business is good in China, because we have plenty of demand for their cashmere sweaters here in America. However, cashmere is made from goats, and the hooves from their goats (which are like stiletto heels) produce huge dust clouds which drift all over China to Oregon and Washington in the States. Obviously, residents in Oregon and Washington don't appreciate these dust clouds from China. So in this case, the externality is the dust clouds from China annoying the residents of the Pacific northwest. Chinese manufactors charge a price for their cashmere sweaters, which American demanders pay for, but both don't realize the extra cost of having dust clouds hovering from China due to the goats from China--unless you're a resident of Oregon or Washington. Should we as demanders reduce our demand for cashmere sweaters, so that residents of Oregon and Washington can enjoy fresh clean air? Should manufacturers in China reduce their supply of cashmere sweaters (and goats) and raise the price so as to not produce such huge dust clouds? Or should either side not care about the issue at all, and let the invisible hand work things out on its own?