The Economic History of the United States 5

The Economic History of the United States 5

1. Lecture 5
The Economic History of the United States

2. Quiz 2
Chapters 3, 4, & 5

5. Where
is the
iPhone
made?

7. ARM Holdings
Wolfson
Marvel
Skyworks
CSR
Linear Technologies
NXP
National Semiconductor
Sharp
Samsung
Toshiba
Infineon
Broadcom
Numonyx
Micron
Dialog Semiconductor
Texas Instruments
STMicroelectronics
Silicon Storage
RF Microdevices
Cirrus Logic
U.S.
U.K.
Germany
Korea
Japan
Taiwan
China

8. Made on Earth

9. Only possible
because billions
of people have
learned to
cooperate with
each other
To serve one
another

10. The most creative-
destructive device
ever invented

14. 99% Reduction in Energy
449 watts to 5 watts

15. What does it cost to ship an iPhone from China to the U.S.?
54¢
450,000 iPhones cost about $242,000 to charter
Fuel accounting for more than half the expense. 44,700 gallons

16. Quiz
What is wealth?
What is capital?
In a trade there is always one_____ and two______
What is an invention?
What is an innovation?
How does an economy grow?
Anything we value
Anything we can use to create value
price values
An idea made real
A profitable invention
Continuously innovating our capitals

17. 100 1 2 3 4 5 6 7 8 9
$100
0
$10
$20
$30
$40
$50
$60
$70
$80
$90
Quantity
Price
D
1
S
1

18. 100 1 2 3 4 5 6 7 8 9
$100
0
$10
$20
$30
$40
$50
$60
$70
$80
$90
Quantity
Price
D
1
S
1

19. Shift Demand
Income
Prices of Related Goods
Tastes
Population & Demographics
Expected Future Prices

20. 100 1 2 3 4 5 6 7 8 9
$100
0
$10
$20
$30
$40
$50
$60
$70
$80
$90
Quantity
Price
D
1
S
1
D
2

21. 100 1 2 3 4 5 6 7 8 9
$100
0
$10
$20
$30
$40
$50
$60
$70
$80
$90
Quantity
Price
D
1
S
1
D
2

22. 100 1 2 3 4 5 6 7 8 9
$100
0
$10
$20
$30
$40
$50
$60
$70
$80
$90
Quantity
Price
D
1
S
1
D
2
D
3

23. 100 1 2 3 4 5 6 7 8 9
$100
0
$10
$20
$30
$40
$50
$60
$70
$80
$90
Quantity
Price
D
1
S
1

24. Shift Supply
Prices of inputs
Technological change
Price of substitutes in production
Number of firms in the market
Expected Future Prices

25. 100 1 2 3 4 5 6 7 8 9
$100
0
$10
$20
$30
$40
$50
$60
$70
$80
$90
Quantity
Price
D
1
S
1
100 1 2 3 4 5 6 7 8 9
$100
0
$10
$20
$30
$40
$50
$60
$70
$80
$90
Quantity
Price
D
1
S
1
S
2

26. 100 1 2 3 4 5 6 7 8 9
$100
0
$10
$20
$30
$40
$50
$60
$70
$80
$90
Quantity
Price
D
1
S
1
S
2
S
3

27. 100 1 2 3 4 5 6 7 8 9
$100
0
$10
$20
$30
$40
$50
$60
$70
$80
$90
Quantity
Price
D
1
S
1

28. 100 1 2 3 4 5 6 7 8 9
$100
0
$10
$20
$30
$40
$50
$60
$70
$80
$90
Quantity
Price
D
1
S
1
Maximum
Price

29. 100 1 2 3 4 5 6 7 8 9
$100
0
$10
$20
$30
$40
$50
$60
$70
$80
$90
Quantity
Price
D
1
S
1
Maximum
Price
Demand 6
Supply 4
Shortage 2

30. 100 1 2 3 4 5 6 7 8 9
$100
0
$10
$20
$30
$40
$50
$60
$70
$80
$90
Quantity
Price
D
1
S
1
Minimum
Price
Demand 4
Supply 6
Surplus 2

31. Invent
Manufacture
Market
Distribute
Finance
Maintainance

32. U.S. Farmers
1800 - 90 percent

33. U.S. Farmers
1900 - 45 percent
Gasoline engines
replaced horses

34. U.S. Farmers
2012 - 2 percent

35. What happened to those 88 people?

37. Culture
Human Beings
Ideas
Physical Human IntellectualFinancial
Inventions
Entrepreneurs Free Markets
Innovations
The Capitals of Innovation

38. What is wealth?
Any thing we value

39. What is Economics?
The study of how
human beings create
value for one another

40. What is Capital?
Any thing we can use
to create value

41. Culture
Human Beings
The Capitals of Innovation

43. Cultural Capital?
How people treat
each other

44. Cultural Capital is
determined by the
worldview of leaders

45. Worldview
Political
Legal
Economic

47. Property Rights
Rule of Law

49. Culture
Human Beings
Ideas
The Capitals of Innovation

50. Idea
A thought about how to
potentially create new
value

51. Culture
Human Beings
Ideas
The Capitals of Innovation
Physical

52. atoms and energy
natural resources
time
buildings
equipment
things than make things
Physical Capital

53. Culture
Human Beings
Ideas
The Capitals of Innovation
Physical Human

54. trust
health
skills
knowledge
personality
relationships
Human Capital

55. Integrity
Competence
Trust

56. I look for three things in
hiring people.
The first is personal
integrity, the second is
intelligence, and the third
is a high energy level.
But if you don’t have the
first, the other two will
kill you

57. Culture
Human Beings
Ideas
The Capitals of Innovation
Physical Human Intellectual

58. knowledge
technology
methods
patents
Intellectual Capital

59. over
10,000,000
today

60. Culture
Human Beings
Ideas
The Capitals of Innovation
Physical Human IntellectualFinancial

61. Money put at risk
over time
Financial Capital

63. money put at risk over time
money is time
savers and borrowers
(1+r)
n
insurance  
limited liability corporations
double entry accounting
Financial Capital

64. Culture
Human Beings
Ideas
The Capitals of Innovation
Physical Human IntellectualFinancial
Inventions

65. Proof of an Idea
Thought to reality
Invention

66. Culture
Human Beings
Ideas
The Capitals of Innovation
Physical Human IntellectualFinancial
Inventions
Entrepreneurs

67. Risk Takers
Value
Inventions to Innovations
Freedom to Discover
Learning
Failure
Entrepreneurs

68. Inventor Entrepreneur

69. Thomas Edison
Inventor and
Entrepreneur
Very Rare

70. Culture
Human Beings
Ideas
The Capitals of Innovation
Physical Human IntellectualFinancial
Inventions
Entrepreneurs Free Markets

71. Where buyers and
sellers discover value
Free Markets

72. Solve each other's
problems with a price
system
Free Markets

73. Information system
that creates
incentives
Price System

74. Market-Successful
Invention
Profitable Invention
Innovation

75. Culture
Human Beings
Ideas
Physical Human IntellectualFinancial
Inventions
Entrepreneurs Free Markets
Innovations
The Capitals of Innovation

76. We create value by
continuously innovating
our capitals