Tyler Harvey ECON H 211 Economic Naturalist 1: NFL Placekicker Salaries According to Sports Illustrated, the average salary

of kickers in the NFL is $868,005 which is second to last among all positions. However, the 25 highest scoring players of all time are all kickers and at the end of a season it is usually the kicker that will be the highest scoring player on the team. Why are the highest scoring assets on these teams paid so little in comparison to their counterparts? One possible reason may stem from the degree of specialization required by kickers. While running backs can occasionally catch a ball and linebackers can play safety without too much adjustment, kickers are often shorter and smaller than other players and cant really do much besides kicking. Because of their comparative advantage in kicking the opportunity cost of them kicking instead of playing another position (and in turn their value) is much lower than a more versatile player. Another possibility is simple supply and demand. On average, kickers have the longest careers of any players in the league and there are often only a handful of them on any roster, since they do not experience as much injury and physical deterioration over time. This means that the demand for new kickers is very low each new season. However, unlike professional football, where kickers can enjoy long careers, college football kickers (the main supply for the NFL) can only play a maximum of 4 seasons. Also, since kicking is such a specialized position, most college kickers are on a relatively small skill spectrum. So each year there is a large supply of relatively equally skilled kickers hoping to play professionally available for franchises to choose from. By the law of supply and demand, this will drive salaries down. The large range of skills for players at other positions (like quarterbacks), and their increased likelihood of injury and shorter career leads to a small supply of elite athletes of which there is much greater demand, accounting for the higher value of these players. Economic Naturalist #2: Waiting in Lines Checkout and customer service lines where multiple can operate one of two ways: a single queue of customers as is often seen in banks and airports, or separate lines for each register like those found at Wal-Mart and other retailers. The first fundamental welfare theorem tells us that the latter method, which allows competition to dictate line choice, should be equally as more efficient than the regulated queue style line. Why does the opposite seem to be true in practice? In theory, the theorem is actually upheld. In an ideal situation, where no cashier is available while there are still customers in line, both methods will process all the customers in the same amount of time, so both are equally efficient. However, the reason this breaks down in practice is because cashiers are only continually serving customers in the queue style system. In a store with multiple lines this may or may not happen, depending on the individual customers. For instance, if a customer notices a line has emptied next to him he has the option of moving over or staying. If he thinks rationally, he will always move to the empty line but perhaps he

forgets to ignore the sunk cost of the time hes already spent waiting. There is always the possibility that he doesnt notice the open line, has already placed items on the conveyer belt, or any other number of possibilities. Another interesting question is why dont more (or all) retail stores implement the superior queue system that virtually all banks and airports do? The reason is likely a completely psychological one. Customers view the single, line as a longer wait even though it moves faster. In banks and airports, customers have to wait in this line immediately upon arriving and the goal is to reach the end of the line. Because this is the goal, the customer is more patient and less bothered by the wait. In retail stores, the waiting in line part comes after navigating the store and the goal is getting items, so customers are less patient and the wait is perceived as an additional burden since it comes after the goal has been accomplished. Economic Naturalist 3: The Price of Calculators Why has the price of graphing/engineering calculators stayed fairly constant, while the price of personal computers and cell phones, which are capable of doing the same functions as calculators, have fallen dramatically? Our supply and demand model predicts that when the price of a substitute falls, it leads to a negative shift in demand, lowering both the equilibrium price and quantity. Additionally, when the costs of production decrease (which is the case here as transistors/processors have become cheaper to manufacture) there will be a positive shift in the supply curve, lowering the equilibrium price further while increasing the equilibrium quantity. While the magnitudes of these effects are ambiguous, we can assume that they will be at least similar, since the cost of other electronics fall for the same reason as calculators. This should mean that the equilibrium quantity shouldnt change much over time, but the price should fall drastically although its observed that the price has not fallen much (if any) over the past decade. I propose that the reason we observe this lack of price change is due in part to restrictions is on the demand side of market. I assume that the main demanders of calculators are students. Since high school teachers and college professors often require that their students purchase calculators, students will buy them regardless of the price, making the curve pretty inelastic. This restriction of calculators being required probably cancels out most of the substitution effect, since professors dont allow computers or smartphones to be used in place of calculators. Since this still doesnt account for the lower production costs, it can be concluded that Supply and Demand is not the appropriate model to predict this situation. This indicates that there is something of an artificial monopoly created on these high end calculators, both from there being so few producers or from the fact that professors not only require a specific type of calculator, but many of them also stipulate which specific brand their students must purchase.

Economic Naturalist 4: Corn Subsidies and Primary Elections The US Energy Policy Act of 2005 mandates that billions of gallons of ethanol be blended into vehicle fuel each year, guaranteeing demand for domestically produced corn. These subsidy programs give farmers extra money for their crops and guarantee a price floor and have persisted even as the price of inflation adjusted price of corn has quadrupled over the past decade. Why do we continue to subsidize corn at 2-4 times the level of other agricultural products if we already guarantee there will be demand for it and it is not in danger of prices dropping too low for farmers to profit? I believe the answer to this is due mainly to incentives. The state which produces the most corn in the United States is Iowa whose 2,334,150,000 bushels per year make up 18.96% of US production. Iowa is also noteworthy as being the first state to hold a primary or caucus every election year. Because of this, political candidates eager to get an edge over competitors early in the race and elected officials worried about maintaining control of their office have huge incentives to support continued or increased corn subsidies, even if they are higher than they should be.