EconAir

  Assumptions Economic theory starts with a set of assumptions about behavior.  The most basic is the assumption of rationality in the limited sense that individuals can calculate and compare the marginal costs and marginal benefits of decisions.  They then pick that decision that maximizes net benefit. Economists and psychologists have attacked this assumption.  Some have won Nobel Prizes in Economics. It is refuted by virtually everything that has been learned in cognitive psychology and neuroscience. Yet it remains the foundation of economic theory. This assumption is not even supported by one of economists’ favorite tool, game theory.  One famous experiment, the “ultimatum game,” demonstrates that moral considerations can overcome maximizing income. This outcome seems to hold for many different social groups and many different cultures. Profit Maximization Maybe the most defensible assumption is profit maximization.  While it is...

Jane Addams' Hull House INTRODUCTION AND ISSUES Nonprofits are the third part of the American economy and society but discussed less often. About 1.6 million nonprofits accounted for about 12.3 million paid employees in 2016, more than 10.2% of the entire workforce. Nonprofits sold about $940 billion of goods and services in 2014, about 5.4% of GDP. Some of the goods and services of nonprofits are given away; they are considered transfer payments and not counted in GDP.  Total revenue, including imputed value of donated goods and services of nonprofits was $2.01 trillion in 2015, about equal to the total revenue of all state governments.  Employment and charitable giving data indicates that nonprofit revenue continues to grow. Private charitable giving in 2018 is expected to be around $410 billion. The average household's cash contribution is around  $2,100.    Have you ever: Gone to a private school or college? Enter...