Want v Need

What are a want and a need?
Make sure to take the quiz. It is probably the easiest quiz since quizzes were created.
This is the most basic form of economics. We were all taught this as kids, just in case we don't remember here is the blog for you.
A need is something you have to have.
A want is something is something you would like to have.

A need is anything you need to survive. A need is a house, food, water, clothes, etc. A want is something you don't necessarily need to get by. A want is an iPod, car, plasma TV, etc. When looking at spending for items figure are the wants and needs.

This can help with over spending. Instead of buying a new TV, pay off the credit card bill.
Instead of buying a new xbox, buy groceries.

Is ice cream a want or a need?
Ice cream is food, so it must be a need. Ice cream is not essential food to survive. It is not essential because ice cream has fats that are not good.

Liquids
Liquids are essential for living. Water, milk, and soda are all liquids, but are they all needs. Water and milk provides for our health. Soda does not provide for our health and is not a need.

What I learned from the website is if it is good for us it is a need.

Insider Trading

Today my blog is going to be about insider trading. A great example of insider trading is the movie Wall Street. Wall Street was released in 1987. The movie stars Charlie Sheen as Bud Fox, Michael Douglas as Gordon Gekko. Martin Sheen plays Bud's father Carl, and Martin is the father of Charlie Sheen in real life. Bud works as a stockbroker; he wants to "bag the elephant" (get a big client). Bud wants to bag Gordon Gekko. He meets Gordon on his birthday and gives him ideas he has. Gordon does not like them, and Bud gets desperate. Bud gives Gordon insider information from a lunch Bud had with his dad. Insider Information is highly illegal, this is because the information is not brought publically. The Information allows for stockholders to make more money without the risk. The movie illustrates how the trading is illegal when Bud is arrested at the end of the movie. The most memorable part of the movie is when Gekko says "Greed is good." This line shows how some corporate leaders out their do not care as long as they are making money. Greed in this case is not good; greed ruined the career of a broker. Greed sent Gekko to jail, and greed nearly cost Carl his job.

Links
http://www.imdb.com/title/tt0094291/quotes
http://www.youtube.com/results?search_query=greed+is+good&search_type=&aq=f
http://www.sec.gov/answers/insider.htm

Please rent Wall Street at your local video rental establishments

Budget

The photo above is a budget.
What is a budget? A budget is a financial document that helps keep track of income and expenses. This can be done on a piece of paper, by use of a spreadsheet, or with the ease of a financial program. What does a budget accomplish? A budget allows us to see where our money is going, because of listing out income and expenses.

How do I make a budget? The steps below should help in the process to create a budget.
1. List income
2. Add income
3. List Expenses
4. Add expenses
5. Subtract expenses from income
6 Evaluate net income

A budget can be made for weekly, monthly, or yearly financial activities. It all depends on the person who makes it.


What are income, expenses, and net income?
Income is what we make, like a paycheck, or a birthday check.
An expense is what we pay, such as a cell phone bill, or car insurance.
Net income is income minus expenses, or money left over after expenses.

Can a budget change?

Yes, a budget can change. The change happens in net income. Changes can occur by getting a raise at work, getting a cheaper plan on your cell phone bill, and having to pay less on car insurance.

What is the ultimate result of a budget?

The ultimate result is to get a plan of action. A budget helps save money for a trip, a down payment on new car, or a 60 inch plasma screen TV.

With a little bit of work you can help save money by seeing where it is going to.

Sites used
http://biztaxlaw.about.com/od/glossaryb/g/Budget.htm
http://quicken.intuit.com/

Photo is from
http://www.hc-sc.gc.ca

I hope I am not as confusing this week.

Assumption Making An Economists Life Easier

What are assumptions? Why would an economist use assumptions? When you look at the word assumption you see the word assume.
Assume means to take for granted or without proof. This relates to economics because, an economist is like a scientist. Scientists use the Scientific Method to make experiments easier, and economists use assumptions to make their experiments easier. A good example could be that seat belts are in cars. Now that is not an? What you need to ask is how to continue onto that. That is the idea of assumptions. You start with something small such as seat belts are in cars and add on by saying that people would drive faster and use up more gas. Now that is an assumption. Or another assumption could be people like sports cars, sports cars drive fast, drivers drive sports cars fast, and use gasoline faster. Now that we have our assumptions we can use these hypotheses to determine the effect on the supply and the demand of gasoline


Here is another example. Government lowers taxes for corporations, corporations use extra profit to higher more workers, and unemployment rate goes down. This is an assumption of unemployment rate and taxes. None of these assumptions could be right but it gives and idea of why something might be.


So the next time you are hypothesizing use assumptions to make your life easier.


Assume definition is from http://dictionary.reference.com/