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  • Essay / Weird Economy - 1315

    Economy; is an important topic for understanding how finances work. The common definition of economics is the social science that analyzes the production, distribution, and consumption of goods. Freakonomics, the title of this book makes the reader wonder what this book is about. From the title and even the cover photo, it is clear that this is no ordinary economics textbook. Yet the authors collected data and analyzed it to draw conclusions about unusual hypotheses. The photo on the cover is actually a good visual of the contents of the book, it looks like an apple on the outside but is orange on the inside, meaning there is a dark side to everything, just like the says the subtitle of the book. Authors Steven Levitt and Stephen Dubner take the economics of everyday situations as the subject of this bestselling book. Steve Levitt in the explanatory note at the beginning of the book is necessary reading to better understand the author's purpose for writing the book. They explain that they are adopting a new way of approaching life's daily conundrums (xxiv). As the subtitle suggests, they investigate the dark side of real-world problems and the subtle connections between them. Levitt's position is that economic modeling is a science at their disposal with excellent tools for obtaining answers to the questions he poses in the book. Levitt believes that economics is about more than finances and the movement of goods. Even so, the authors acknowledge that many of Levitt's peers do not recognize this work as economics at all (xxv). Regardless of the controversy, Levitt emphasizes that economics is the science of measurement and that it uses data and patterns in data to gain insight (11). ...... middle of paper ...... but the main advantage of this book is not knowing that the business model of a drug dealer is actually like that of McDonald's - as entertaining as it is - he. Instead, the value of this book lies in the realization that we should not accept the common wisdom of society, nor take things literally. The authors went on to say that there was no unifying theme in the book, but emphasized that there was a common thread: it was about thinking sensibly about how people behave in the real world. Remember to look, discern and measure (209). We should look at social trends and apply our understanding of incentives and what motivates people. Levitt wants us to understand that economics is not just about dollars and cents, but a way to understand the incentives that shape behaviors. Just the image on the cover reminds us of an apple or an orange, there is a hidden side to everything.