《經(jīng)濟(jì)學(xué)的思維方式》課后習(xí)題答案

RESPONSESTOTHEDISCUSSIONQUESTIONSOFCHAPTER1:

Thisquestionhighlightsthesignificantbutwidely-overlookedfactthatagreatdealof

importantcooperationoccursamongpeoplewhoknowabsolutelynothingaboutoneanother.

Amarriedcoupleplanningavacationtogethertypicallycooperatesbyusingextensiveand

detailedknowledgeofeachothefspreferences,habits,allergies,andsoon.Butthepeople

whocooperatedtomakeorangejuice,cereal,milk,andcoffeeavailabletoBoettkethis

morningdidn'tevenknowthatBoettkeexistsor,forthemostpart,abouttheexistenceofthe

otherswhosecooperationhelpedtoproducehisbreakfast.Economictheoryisespecially

usefulinexplaininghowcooperationoccursincasesofthelattersort,andalsowhy

cooperationsometimesfailstooccur.

Driverswouldhavelittletroubledecidingtheywereonurgentmissions,andthe"urgent'1

lanewouldprobablybejustascrowdedasalltheothers.Eveninaworldofunselfish

drivers,itwouldbeimpossiblefordriverstoassesstherelativeurgencyoftheirownand

otherdrivers*missions.Moreover,themoreinconsideratedriverswouldbemostreadyto

usethe"urgent"lanes,sothatsuchasystemwouldendupprovidingatimesubsidytothe

projectsofmoreselfishdriversthroughatimetaxontheprojectsofmoreconsideratedrivers.

SinceMotherTeresawasinterestedinbuildingaleprosarium,sheclearlyfurtheredher

owninterestindoingso.Butitwouldbeoddtocallthis"selfishbehavior.'*Actingin

one'sowninterestisselfishonlyifone'sinterestsareselfish.Contrarytowhatmany

economistscarelesslyassert,economictheorydoesnotassumethateveryonebehaves

selfishly.Perhapseconomistsevenmisleadpeoplewhentheysaythat"peopleactintheir

owninterest.nItmightbebettertosaythatpeopleacttopromotetheprojectsinwhichthey

areinterested.Thatavoidsthemisleadingsuggestionthateconomictheorypostulates

selfishorgreedybehavior.Itdoesnotdoso.DidMotherTeresaeconomize?Sure.She

decidedhowtobestuseher$190,000award.ShecouldhavedonateditalltotheJerry

LewisTelethon,investeditinYahoo!stock,ordonateditforthepurchaseofnewbooksatthe

CalcuttaLibrary.Sheinsteadusedtheawardtopromotewhatshebelievedwasthemost

urgentprojectdemandingherattention.Becausethatawardcouldhavebeenusedforother

valuableprojects,sheeconomized.Sheselectedthemostvaluableuse-inherview—for

thatmoney.

Theauthorofthatnewspaperitemwasprobablytryingtodistinguishbetweenmothers

whoseprimarygoalisadditionalincomewhentheychoosetowork,andmotherswhose

primarygoalissomethingelse,suchasthesatisfactionofafulfillingcareer,oranopportunity

toescapetheinsistentdemandsoftheirchildren.Butbothkindsofmotherschoosetowork,

althoughsomechoosejoyfullyandothersnodoubtchoosewithsadnessandregret.

Wecouldinterprettheseresultsasevidencethatpeopleareashamedtoadmitaninterest

infinancialrewards.Alternatively,theresultsmayindicatethatpeoplearelesscharitablein

judgingotherpeople'sbehaviorthaninjudgingtheirown.Peoplerecognizethecomplexity

oftheirownmotivationsmorereadilythantheyconcedethecomplexityofotherpeople's

motivations.Butevenifthefinancialrewardsarenotaprimefactorinmostpeople's

decisiontoattendlawschool,theysurelyplaysomeroleinalmosteveryone'schoice.

Changesintheincomeprospectsoflawyerswillthereforeaffectthenumberofpeople

choosingtoenterlawschool.

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AdamSmitharguedinTheTheoryofMoralSentiments(alsowritteninthe1700s)that

peoplewanttoincreasetheirmoneyincomesprimarilyinordertoenhancetheirstatus.But

ColinCampbell,aBritishsociologist,recentlyarguedthatanotherfactorisimportant.He

arguesthattheinsatiabledesireforadditionalconsumergoodshasitsrootsinthepracticeof

daydreaming,andthatitexpressesadesiretoexperienceinrealitysomethingthathas

previouslybeenenjoyedinimagination.Ifthistheorystrikesyouasfar-fetched,read

Campbelfscogentessayon"ConsumingGoodsandtheGoodofConsuming"inCritical

Review,Vol.8,No.4(Fall,1994).

Peoplewillstartplanningtoarrivelater(becausethemeetingsneverstartontime),which

willinducenonpunctualpeopletoarrivestilllater,andsoonuntiltardinessbecomesgeneral.

Theactualstartingtimeformeetingswillbecomeincreasinglydifficulttopredict.

Manyruleshavedevelopedtodefinetherightsandresponsibilitiesofuniversity

employees—president,deans,professors,registrar,custodians,departmentheads,andmany

others.Thehumanandphysicalresourcesofuniversitiesareorganizedeachtermina

complexdancethatproducesmoreorderthanchaosbecauseuniversityemployeesareforthe

mostpartdiligentlyexercisingtheir''propertyrights"(andobligations!)andfulfillingtheir

responsibilitiesinfaithfuladherencetotherulesofthegame.Hundredsofstudentsmanage

toslipintoclassroomseatswithoutconflictorconfusionbyfollowingthesimplerule,nSeats

belongforthishourtothosewhofirstoccupythem.1'

Beaviscanflunkbothcoursesifhewasteshisstudyingtime.Forexample,hegoesto

thelibrarywithhistextbooksandassignments,butspendsthreehoursplayingGameboy.

HowcanheearnatleastaCinbothcourses?Hecanincreasehisoverallstudytimefrom

threetosixhoursperweek(andnotwastehistime,ofcourse)and/orattendastudyskills

workshopinordertoincreasehisproductivity.Thisisanissueofmakingtradeoffssubject

toaresourceconstraint,andbreakingthroughtheresourceconstraint.Wewillgointomore

detailinChapter2,usingthenotionofaProductionPossibilitiesFrontier.

Wemeanthatweseenocausalconnectionbetweenobservedevents.Forexample,

manypeoplebelievethatgetting"chilled"causesthemtocatchacold;andeverytimethey

comedownwithacoldtheywillrecallsittinginadraftorgettingtheirfeetwetorgoingout

bareheadedonawindyday.Yourauthorsthinkthat'sjustacoincidence,becauseourtheory

ofcoldshasthemtransmittedbyvirusesandleavesnoroomfor"chills"asaneffectivecause.

Moreover,sincewehaveatheorytoexplainwhypeoplerecallgetting"chilled"eachtime

theycatchacold,wecan"explainaway”theevidencetheothertestimonyprovides.Your

authors?theoriesdeterminewhatevidenceyourauthorswillaccept.Don'tforget,thedata

neverspeakforthemselves.Datahavetobereadandinterpretedthroughsometheoretical

framework.

Ofcoursephysiciansarebiased.Yourauthorswouldn'twanttobediagnosedortreated

byonewhowasnot.Weacquireknowledgeaswegothroughlife.Thefactthatsomeofit

willturnouttobemistakendoesn'timplythatwewouldbebetteroffthrowingawayallour

accumulatedpreconceptions.Sincewedon'thavetimetotesteveryhypothesisthatcomes

ourway,it'ssensibletodiscardwithoutexaminationthosethatappearabsurdfromthe

perspectiveofwhatwethinkwealreadyknow.HereisamarvelousquotationfromJames

McCawley:"Reasondoesnotestablishthataconclusionistrue,butatmostthatitinvolves

noerrorsbeyondthosethatoneisalreadycommittedto."FromCriticalReviewyVolume4,

Number3(Summer,1990),p.379.

Ourtheoreticalframeworktellsusthatwomenwhodon'twantchildrenorwhodon'twant

themforquiteawhile(andsomayneverhaveany)aremorelikelytopursuepostgraduate

education.Ourtheoriesrejectasutterlyimplausibletheclaimthatawomanwhowantsto

havechildrenlowersherfertilitybytakingafifthyearofhighereducation.Butweconcede

thepossibilitythatafifthyearofcollegeandthecareeropportunitiesitopensupmaychange

themindofawomanwhobegangraduateschoolfullyintendingtohavechildrensomeday.

It*samazinghowmuchwethinkwe"know"evenwithoutanydirectexperienceorexplicit

knowledgeoftheexperienceofothers.

RESPONSESTOTHEDISCUSSIONQUESTIONSOFCHAPTER2:

ThebullygainsJack'sglove.Jacklosesaglove,andgetsalumponhisheadaswell

(notaneconomicgood,butinsteadaneconomicbad!).Clearlythebullyincreaseshis

wealth,andJackloseswealth.Thisoccursbecausetheexchangewasnotagreeduponby

bothparties;itwasacoerced,orinvoluntarytrade.

(a)Manypeopledoinfactincludethem.Buttheonlyconsequenceisadeepenedsense

oflossandregretoverthepassingofsteamlocomotives,(b)Iftheycouldcollectthefeeat

alowenoughcost,thosewhomakethedecisionswouldbepersuadedtoincludethevalueof

otherpeople'saestheticpleasureswhencalculatingthevalueofasteamlocomotive'soutput.

It*sthehightransactioncoststhathavedeprivedallussteamlocomotiveloversofsomuch

deepsatisfaction,(c)Thiswouldincreasetheirefficiency,perhapsbyenoughtobringsome

backintoregularuse.MostofthesteamlocomotivesstillinoperationintheUnitedStates

todayseemtobepullingtourists.

Italldependsonwhatthemusicianistryingtoaccomplish.Ifshecan“getby”witha

cheapguitar,sheprobablywon'tbeinclinedtospend$12,000onthe1956Fender.BigJack

Johnson,theNorthMississippibluesguitaristandformermemberoftheJellyRollKings,

oftenusesarelativelycheapSquireguitarasopposedtoaFender.Itismuchlessexpensive,

andhecanstillgetthesoundandthestyleheseekswiththeSquire.Priceoftendoesmakea

bigdifference...iftheFenderweretosellforlessthantheSquire,BigJackmightbeinclined

toswitchguitars.ThesameholdsforPrychitko,whofindshisGuildacousticguitarisjust

fineforplayingwithhisfamilyandfriends.Yet,ifhecouldgetamuchnicer-sounding

Martinforacouplehundreddollars(one-tenththegoingprice)hemightverywellbeinclined

toswitch.Atcurrentprices,however,it'sjustnotworththecost!

Italldependsonwhatthemusicalactistryingtoaccomplish.Bookingaconcertat

MadisonSquareGardenscouldcosttensofthousandsofdollars;bookingaconcertatthe

localbarwillcostsignificantlyless.Sowhydoesn'tEricClaptonbookatyourlocalbar?

Becausethebenefitstohimarefarlessthanhiscosts.Ontour,ifClaptonbooksanightata

localbar,hesacrificesanightatanamphitheater,whichcouldhavegeneratedtensof

thousandsofdollarsforhim.Again,thequestionofwhichismoreefficientcanonlybe

sensiblyanswered,intheeconomicwayofthinking,byassessingwhattheindividualsare

tryingtoaccomplishwiththeirtalentsandresources.Whatisefficientforsomeonemight

notbeefficientforothers.Ontheotherhand,ifyourbandbooksatthelocalbar,atbestyou

giveuptheopportunitytobookatanotherbaronthesameevening.Youdidn'tgiveup

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somethinglikeaMadisonSquareGardenspossibility.Perhapsthecosttoyourbandisonlya

couplehundreddollars.

Perhapsyouarenowgettingtheidea.Howcananyonepossiblyanswerthisquestion?

Statedthisway,itisameaninglessquestion.Efficiency,intheeconomicwayofthinking,

canonlybeassessedinthecontextofone'sprojects.Whatistheexpectedbenefitofhaving

aneight-cylinderSUVvs.asolar-poweredcar?Andthatmustbeweighedagainstthe

expectedcostofowningandusingone.

Thosewhoinsistthathouseholdswastemoneybypurchasingexpensiveconvenience

foodsarebehavingasiftheybelievethatmoneyistheultimategoodforhouseholds.An

economizingorefficienthouseholderwillweightheopportunitycostoftimespentpreparing

foodagainsttheopportunitycostofpurchasingsomeoneelse'sfood-preparationservicesas

packagedin"convenience'1foods.

(a)Economictheoryassumesthateveryoneisbehavingefficiently.Weinferthevalues

thatdriversinsingle-passengervehiclesplaceuponinputsandoutputsbyseeinghowthey

behave.Ofcourse,peopledomakemistakes,andthenlookbackatwhattheyhavedone

anddecideitwasinefficient.Butitwasanefficientactionatthetime,whentheactorhad

lessadequateinformation.AsChapter7willemphasize,itiscostlyandtherefore

sometimesinefficienttoacquireadditionalinformationbeforedeciding,(b)Whether

becauseofdifferencesinsituationordifferencesincharacterandtemperament,thepeople

ridingthebusassigndifferentrelativevaluestocertaininputsandoutputs.(c)Suchcritics

areassigningevaluativeweightstotheinputsoroutputsofotherpeoples*actionsdifferent

fromtheweightsassignedbytheactors.Theymaybeobjectingtothecosts(airpollution,

trafficcongestion)thatdriversimposeonothersandignoreintheirdecisionmaking(atopic

forChapter13);theymaybeclaimingthatdriversofsingle-passengervehiclesare

misinformedinsomeway;theymaysimplybeassertingimplicitlythattheirownvaluesare

superiortothevaluesofsuchdrivers.Ortheymaybesayingthatiftransactioncostsdidnot

existoriftheyhadallknowledgeandpowertheycouldarrangethesocialworldinaway

moresatisfactorytoeveryone.Butwhocouldnot?

Fuddisahigh-cost,thatis,inefficienttypist,becausehistimeissovaluableinproducing

legalservices.

(a)Sincecomparisonsofvolume,weight,orcalorieswouldobviouslymakenosense,

wemayreasonablyconcludethatthecomparisonswereofmonetaryvalues,(b)Reflecton

thatforabit,andyouwillstarttorealizethatthefoodtheUnitedStatesimportsismostlya

lotoffancyluxuryitems,forwhichwedoindeedpayhighprices.Butthebasicstuffthat

feedsuscomesoverwhelminglyfromourownland.IftheUnitedStatesisindeedimporting

moredollarsworthoffoodthanit'sexporting,thatisaresultofourenormouswealthandour

consequentabilitytoaffordexpensivedelicacies.Itisinnowayanindicationthatwehave

losttheabilitytofeedourselves.

“Obsolete“equipmentcontinuestobeusedaslongasitsusegeneratesmorefuture

revenuethanfuturecosts.Newequipmentwouldgeneratemorerevenue;butunlikethe

equipmentnowinplace,itsacquisitionwouldentailadditionalcosts.Anairlinereplaces

727swith767swhenthatisexpectedtoenlargeitsanticipatedstreamoffuturenetrevenue

(revenueminuscost).

Somepeoplebelievethatusingaresourceforentertainmentpurposesismorewasteful

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thanusingitfor"serious**purposes.Thisalwaysstrikestheauthorsasanextraordinarily

solemn,joylesswayoflookingatlife.Moreover,itisahardpositiontomaintain

consistently.Weprobablywouldnotneedtoconsumeanygasolineatall.Wheredoes

wastebegin?

(a)Thiswillincreasetherelativeefficiencyofno-tillfarmingbyraisingthecostto

farmersoftilling.(b)Thiswillincreasetherelativeefficiencyofno-tillfarmingbylowering

thecostofcontrollingtheweedsandpeststhataremoreabundantwithno-tillfarming.(c)

Thiswillincreasetherelativeefficiencyofno-tillfarmingthroughitsimpositionofadditional

costsonmaximum-tillagefarming,(d)Thiswilldecreasetherelativeefficiencyofno-till

farmingbecauseanuntilledfieldwillprovidelessaestheticsatisfaction.(e)Thiswill

decreasetherelativeefficiencyofno-tillfarmingbyraisingthecostofaninputthatis

employedmoreliberallyinno-tillfarming.

(a)Whosevaluesareweusingtodecide?Ifit'sthevaluesofthosewiththelegalright

todecidehowthewaterwillbeused,wehavetoseewhattheychoosetodo.(b)Ifwehad

nofoodandnoelectricity,wewouldallpreferfoodtoelectricity.Butwearen'tonthat

margin.Manypeoplewouldmuchratherhavealittlemoreelectricitythanalotmore

food—perhapstokeeptheirrefrigeratorrunningandpreventtheirfoodfromspoiling!(c)

It'sallocatedtotheusethattheownersdeemofmostvaluetothemselves,(d)Adversely

affectedgroupsincludeconsumersofthefoodpreviouslygrown;ownersofbusinessesthat

servefarmersintheSevierValley;downstreamwateruserswhofindtheirflowdecreasing;

peoplewhowanttomaintainthesmalltownsintherivervalley;peoplewhodislike

industrialization;andsoforth.

(a)Landdowntownistoovaluableinotherusestobeallocatedtoagasolinestation.

Whenoneisfound,it'salwaysinatiny,constrictedspace,(b)Thelandwouldstillbetaken

frommoreproductiveuses,atleastasthemarketassessesproductivity,ifitweretakenunder

thepowerofeminentdomain.

Publictransportationsystemsthatcannotpassthistestdogetbuilt.Someonemustthink

theyareefficient.Whatisgoingintothenumeratoroftheefficiencyratio,valueofoutput

overvalueofinput?Re-electionforlegislatorsrespondingtospecial-interestlobbying?

Fantasiesabouttrains?Let'swaitforChapter14.

(a)Overbookingenablestheairlinestoholddownthenumberofemptyseatsandtosell

morepassengerstheseatstheyaskfor.(b)Passengersareabletogetontoflightstheywant

totakeandfromwhichtheywouldhavebeenexcluded,despiteemptyseats,underapolicyof

nooverbooking,(c)Underthenewsystem,passengersinahurry(whoprovedhowvaluable

theirtimewasbyarrivingattheairportshortlybeforetheflight)alwaysgetontheirflight;

passengersnotinahurrygetmoneyfortakingalaterflight;airlineagentsatthegateavoid

nastyargumentswithpassengerswhoarebeingbumped;theairlinescontinuetheefficient

practiceofoverbooking,anddon'treapthewrathofvaluablepassengerswhohavebeen

involuntarilydeniedboarding.Italmostseemsasifeveryoneisbetteroff.(d)Thereisno

feasiblewaytoconductthenecessarynegotiations.Thetransactioncostsaretoohighgiven

thepresentpoliticizedsystemofassigninglandingslots.(e)Thecrucialstepwasthelaw

thatgavepassengersalegally-establishedrighttospaceonanyflightforwhichtheyhad

confirmedreservations.Thismeansthattheairlinehastopurchasesomeone'srightswhen

therearemorepassengersthanseats.Asystemfordoingsoconsequentlyevolved.If

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equallycleartitletolandingslotswereestablished,amechanismwouldalmostcertainly

evolvewherebythosewhovaluedthemleastwouldbeinducedbyrelativepricechangesto

letthosewhovaluedthemmosttakeoverthescarcestslots.Clearly-established,

well-definedentitlementsareoftencrucialtotheevolutionofcooperativearrangements.

(a)Putcornonthehorizontalaxisandstrawberriesontheverticalaxisineachgraph.

Gomercanproduce200bushelsofcorn,andzerostrawberries(onepointonhisproduction

possibilitiesfrontier,orcurve)orzerocornand200bushelsofstrawberries(anotherpointon

hisfrontier).ConnectthetwopointswithastraightlinetoillustrateGomer'sentire

productionpossibilitiesfrontier.Noticeithasaslopeof-1(asyoulearnedinmiddleschool,

slope=rise/run).ForGoober,histwopointsare100bushelsofcomandzerostrawberries

orzerocornand50strawberries.ConnectingthosepointsgivesusGoober'sPPF.Notice

ithasaslopeof-1/2.(b)onebushelofstrawberries.(c)1bushelofcom.(d)2bushelsof

strawberries,(e)%bushelofcorn,(f)Goober,(g)Gomer.Pleasenoticesomething

veryimportanthere.Gomerappears“better”atbothcornandstrawberryproduction-he

canproducealargerquantityofeithergood,relativetoGoober.Butthenotionof

comparativeadvantagedoesnotsimplyfocusontotaloutput.Itfocusesontheopportunity

costofproducingaparticularoutput.GomerandGooberhavedifferentcostsofproducing

cornandstrawberries.We'vejustseenthatGooberismoreefficient("hasacomparative

advantage^^)atproducingcorncomparedtoGomer.Rememberthatallquestionsregarding

efficiency(andtherefore,comparativeadvantage)requiresustolooknotonlyattotalbenefit

oroutput,butatthesacrificesoropportunitycoststhatanindividualmustincurtoproduce

thatbenefitoroutput.Reconsiderquestion4again.EricClaptoncanfillbothMadison

SquareGardenandyourlocalbar.Thatdoesn'tmeanhe'smoreefficient,orhasa

comparativeadvantage,atplayingboththebigamphitheatersandthelocalbars,comparedto

yourowngarageband.That'swhyhetypicallydoesn'tdoso.Yourhandcanplaythelocal

baratamuchlowercostthanEricClaptoncan.That'swhyyourbandtypicallybooksthe

smallgigs(perhapsdreamingofmuchlargerfuturegigs)andClaptonbooksthehugegigs.

Eachofyouhavefollowedyourcomparativeadvantage,(h)BothGomerandGooberwould

gainwithanytermsoftradeinthefollowingrange:1bushelofstrawberriesbeingexchange

formorethan1bushelofcornbutlessthan2bushelofcorn.Forexample,1bushelof

strawberriesbeingexchangedforWibushelsofcorn(1%isinbetween1and2).

Asweemphasizedinthetext,tradeisalwaystradebetweenindividuals,asopposedto

streets,cities,counties,states,orevennations.Neitheranationalpoliticalbordernora

time-zoneboundarywithinagivencountrynegatesthemutuallybeneficialeffectsof

voluntarytrade.Bothtradingpartiesenjoyalargermixofscarcegoods(greaterwealth,

economicgrowth)asaresult;that'swhytheychoosetotradewithoneanotheracrosspolitical

borders.MillionsofAmericanspurchaseforeigngoods,butthatfactdoesnotnecessarily

meanthateverycitizenineachcountryisbetteroff.Cheapforeignimportsareattractiveto

manyindividualsinAmerica.Thoseindividualsincreasetheirwealththroughsuch

purchases.Totheextentthatthecheaperimportsleadconsumerstobuyfewer

American-producedsubstitutes,someofthoseworkers(andbusinessowners)maylosetheir

jobs(andtheirbusinesses),astheynowfailtoprovideconsumerswithadesirableproduct.

Butthatistruewhetherthesourceofcompetitionisfromaforeigncountryorinternal.To

understandthispoint,let'ssupposeyounowhaveaccesstoanAmericaninternetbookstore,

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onethatofferssuperiorpricesandservicecomparedtothelocalold-fashionedbookstoresin

yourregion.(Comparedbywhom?Thecustomers.)Theywincustomersfromtheother

localestablishments,evenforcingoneormoretoshutdown.Clearythelocalbookstore

ownersandemployeeshaven'tgainedbytheincreasedcompetition.Clearlytheirwealth

hasnotincreasedascustomersseektotradewithotherswhonowofferabettersubstitute.

Butthat'salargepartofthenatureofmarketcompetition-theattempttoprovideconsumers

withabetterproductorservice,and/oramoreappealingprice.Consumersareconstantlyon

thewatchforabetter,moreattractivedeal.That'swhy,totakeanotherrecentexample,

traditionalAmerican-madetypewritershavebeenreplacedbyandlargewithAmerican-made

personalcomputers.Afreemarketprocess-nationallyandinternationally—allows

potentialproducerstheopportunitytocreatemoredesirableoptionsforconsumers.Itdoesn't

guaranteethatallorevenmostexistingproducerswillalwaysenjoyprofitsandcontinuedjob

expansion.Ifproductionissimplyagoalinitself,thealternativeseemstobetokeep

consumersfromobtainingtheproductstheydesire.Wecouldimagine,forexample,a

domesticpolicythatforcesconsumerstocontinueusingtypewritersasopposedto

word-processors.Thatmightretainjobsinthetypewriterindustry,butitwouldreducejob

prospectsinthesoftwareandpersonalcomputerindustry.Similarly,importrestrictions(in

theformofquotasandtaxesonforeigngoods)mightpreservesomejobsintheU.S.,butit

wouldultimatelyreducejobprospectsforU.S.citizens(suchaswheatfarmers)whosegoods

areexportedtoothercountries.

RESPONSESTOTHEDISCUSSIONQUESTIONSOFCHAPTER3:

(a)Peopledefinetheir"needs1*intermsofwhattheyhavegrownaccustomedto.

CollegegraduatesandRepublicanshavehigherincomesonaveragethandohighschool

graduatesandDemocrats,haveconsequentlygrownaccustomedtospendingmoreeachweek,

andso"need"more"togetby."(b)Wemaysafelyassumethatpeoplewhoare"definitely*'

willingtospend$500foranairbagthinkitmightsavetheirlifeinanaccident.Maywe

inferfromthestudycitedthatmorethantwo-thirdsofthesepeoplewouldratherdieinan

accidentthanforkover$1000?Ofcoursenot.Anair-bagsafetysystemisnotalwaysa

life-savinggood.Mostoftheonesthatareboughtwillneversavealife.Thosewhoare

willingtopay$500butnot$1000believethattheincreasedprobabilityoftheirhavingan

accidentwhichtheysurvivebecauseofanairbagisgreatenoughtowarranttheexpenditure

of$500butnotgreatenoughtojustifya$1000expenditure.Theydon'tincludeairbags

amongtheirneedswhenthepriceistoohigh,(c)Peoplewon'tdiscoveralotoftheirlegal

"needs'*unlesslawyersadvertisetheirwillingnesstomeetthose"needs”atanattractivelylow

pric已Therearesubstitutesforhiringalawyer.Oneistogrinandbearit.(d)Air

conditioningmakespeoplemorecomfortableandmaybealsomoreproductive.Butitis

obviousthatnooneintheworld"needed"airconditioningpriortothetwentiethcentury.

(a)Theassertionthathealthcareisarightmeansalmostnothingunlessthequantityand

qualityareindicated.Shouldpeopleintheireightieshavearighttocoronaryby-pass

operations?Shouldsomeonewhocontinuestoconsumelargeamountsofalcoholhavea

righttoalivertransplant?Theseareadmittedlyextremecases.Buttheymakethepoint

thatitispossibletospendenormoussumsonhealth-careservicesthatprovidefewbenefits.

Whenthosewhoreceivethebenefitsdonotexpecttopaythecosts,theycaneasilypersuade

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themselvesthatthebenefitsaresomethingtowhichtheyareentitledbyright,(b)Health

careisfinallyprovidednotbygovernmentorinsurancecompaniesbutbyphysiciansand

hospitalpersonnel.Whatgovernmentandinsurancesystemscandoisprovidethefundsthat

inturnpersuadehealth-careproviderstoaccepttheobligationtoprovidehealthcare.Keep

thisimportanttruthinmindwhenthinkingortalkingaboutrights:Unlesssomewayis

foundtoinducetheappropriatepersonstoacceptthecorrespondingobligations,theassertion

thatpeople"have"certainrightsissimplyfalseasamatteroffact.Perhapstheyshouldhave

thoserights;buttheydonotactuallyhavet