A Day in the Megacity
- Megacities: huge metropolitan complexes that contain tens of millions of people and are
spread over immense tracts of land
- EX: London + NY + Tokyo
- BIGGEST Megacity: China Pearl River Delta
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A Day in the Megacity
- Megacities: huge metropolitan complexes that contain tens of millions of people and are
spread over immense tracts of land
- EX: London + NY + Tokyo
- BIGGEST Megacity: China Pearl River Delta (the PRD)
- Home to more than 40 million people
- Most people produce goods for world market
- Consumers as well as producers
- Wage of the avg PRD person is relatively low by US standards
- 1980: 800 million Chinese made less than $1.50 per day
- Avg Chinese citizens had enough to eat and live in a house… that is it
- 1959-1961: Great Leap Backward - Chinese govt got economy so bad where
millions of Chinese died from famine
The Invisible Hand
- Economy: a well functioning system for coordinating productive activities - the activities
that create the goods & services people want and get them to the people who want them
- To achieve the level of prosperity of America… you need an economy
- Economics: the social science that studies the production + distribution + consumption
of goods/services
- Command economy: decisions about which factories would produce and what
goods would be delivered to households were made by govt officials
- EX: China before 1980 - consumers were often unable to find necessities
in convenience stores (like toilet paper) but a lot of unnecessities
- Market economy: production and consumption are the result of decentralized
decisions by many firms and individuals
- Invisible Hand: refers to the way a market economy manages to harness the power of
self-interest for the good of society
- The Wealth of Nations by Scottish economist Adam Smith wrote about this
concept - individuals pursuing their own interests often end up serving the
interests of society as a whole
- Microeconomics: study of individuals making decisions and how decisions interact
- Key Idea: validity of Adam Smith - individuals pursuing their own interests often
do promote society as a whole
My Benefit… Your Cost
- Market Failure: happens when individual pursuit of own interests, instead of promoting
the interests of society as a whole, actually makes society worse off (fact of life)
- EX: Traffic congestion - someone driving a car into work in lower Manhattan on a
weekday causes more than 3 hours delay to other drivers, and around $160 in
monetary loss
- EX: Air pollution - overexploitation of natural resources can cause larger issues
like climate change or ocean acidification
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