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Naked Economics Chapter 1 and 2

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1. The main points of chapter 1 in Naked Economics: Undressing the Dismal Science would have to be modern capitalism. Charles Wheeland talks about the Coca Cola Company back during WWII in East Germany. The Coca Cola Company would hand out free coke through the holes in the Berlin Wall. By doing this the Coca Cola franchise doubled in revenue by getting their name across the country. Even though they were losing money at that point in time they greatly expanded the name Coca Cola in Germany. During this time in history the Berlin was being split in two. So only one side of Berlin would know what Coca Cola was. If they did not pass free Coca Cola through the holes in the Berlin Wall Coca Cola would've only been gaining a little profit from one side of Berlin. But since they lost a little income by passing out free Coca Cola to the other side they expanded the brand name Coca Cola. When the Berlin Wall was destroyed both sides would know what Coca Cola was instead of only one group of individuals. Now the people who only got a taste of what Coca Cola was would now be able to go out freely and purchase a package of Coca Cola.

2. Incentives matter because they are a factor that enables or motivates a particular course of action, or counts as a reason for preferring one choice to the alternatives. Incentives make a person or even an economy act in a certain way or view something more vividly. Incentives aim to provide value for money and aim for organization success. I agree with what the author is saying about the black rhino conservation. If the black rhino was seen as cattle we wouldn't be having this discussion right now because the black rhino would be farmed raised. But since the black rhino is a communal piece of property it's seen differently. Anyone could just go up and kill a black rhino for its ivory horn because it's not a part of anyone's farm, ranch, or cattle. Since that is the case the black rhino's presence is fading away because they are easy to access and the horn sells for 30,000 dollars on the black market. But if they were privately owned no man but the owner would have a say so in what happens to his prized cattle that he could raise and produce even more income. If the black rhino never had the ivory horn do you even think people would bother to slaughter them for one part of their body?




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