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Transcript of The Lorax
an economic analysis
Factors of Production
cutting down the trees
the Once-ler's family
super axe hacker
Role: The entrepreneur is where business and profit begins. He/She is the person who decides what they want to produce and how they want to produce it.
Production Possibilities Curve
The Once-ler creates a
the only one producing an item
seller has complete control
no close substitues
Since he creates the Thneed business alone, the Once-ler is in a
the owner makes all the decisions
easy and inexpensive to create a business
no corporate taxes
difficult to raise capital
Medium of Exchange
"and you have to toss in fifteen
shell of a great-great-great-
Specialized Labor Positions
The positions are as follows:
The word "unless" takes on several meanings. The moral of the story is to take care of your environment and means of production as much as what you are actually producing. Being blinded by profit was the Once-ler's downfall, and it led to the destruction of the place he loved. "Unless" is an example of scarcity, the element of economics that plagues society. The truffula trees were a limited resource, therefore, scarcity was present. The Once-ler could have chosen to prevent his fate by planting as many truffula trees as he cut down. In modern times, desforestation is a disease that has destroyed landscapes across the globe. It's a rapidly spreading occurence; industries are built and they require land and natural resources.
Market freedom is both a blessing and a curse. On one hand, consumers are free to become the producers, and make their own products. On the other, the consumers can disregard other businesses, people, and natural elements while seeking their profit. Technology only amplifies this; it can further destroy or create. In Africa, technology is used to clear forests for industrial growth, but their actions lead to deforestation.
From a distance, economic growth and environmental protection are paradoxical ideas. Countries can grow industrially but at the expense of their environment. Countries can have environmental protection in place but have no room to build and create. Everyone makes conscious decisions that affects our environment and economic growth--the responsiblity of promoting both is ours.
The need of land for production is the cause of environmental degregation. If we were to build our businesses and companies in an already industrial area, we could avoid using other space. For example, buildings could be remodeled into skyscrapers to contain large companies in a small space. Another solution is to charge a tax on the use of natural resources, a tax to acquire significant amounts of money for organizations who work in protecting the environment. The tax would not detrimentally alter economic growth because entrepreneurs would be encouraged to fill the empty spots in existing industrial places.
production possibilties when using knitting needles and an axe
production possibilities with super axe hacker
The super axe hacker made the production of Thneeds faster and more efficient. Therefore, the Once-ler is able to supply and sell more to a growing consumer base.
Price Graph & Demand Schedule
200 450 875 1000 1200
the green line represents the equilibrium price
the dark gray line represents supply
In my opinion, the government should place a price floor on the price of Thneeds. If they put the price floor above the equilibrium price, consumer demand would decrease, as they would not want to pay the higher price. Therefore, production of Thneeds slows and the damage to the environment is lessened because the factory is used less.
990 900 875 600 300
new price floor
The Last Truffla Tree - Market Graph
As the supply decreases, the price increases because Thneeds are harder to produce. At first, demand would increase and a shortage would occur. When the price increases, consumer demand decreases as well.
The entire situation relates to the Once-ler in the way of market failure. He produced Thneeds in an inefficient way, destroying the environment as he grew. The only way to solve his problem would be to enact some sort of governmental regulation to deter the monopoly he created.
In a market system, the thneeds were obtained by
giving them out to people
buying them in stores
shipping them across the country
In a traditional system, the thneeds could have only been obtained by giving them out to people, unless the stores were local. The Once-ler's entire business would have stayed in the region he produced them in, therefore disregarding the need of shipping them out.