Thomas Shogren, Introduction, Question #6

I never realized how many things are effected by economics and how things are driven by economic thinking. There were two examples that really stood out to me while reading the introduction. The first example was the situation of insurance companies and women in labor. The situation stated that people wanted insurance companies to pay for two nights at the hospital instead of one since it is a very stressful and painful time for the mother. Upon first thought it sounds like a great idea but there is always going to be a repercussion due to the decison. The insurance company would have to pay more for the extra night at the hospital so they would have to find ways to make the money back. Most likely the cost of life insurance would be raised, but with higher prices for life insurance there will be less people who can afford life insurance. I never noticed how economics can make people make certain decisions.  The second example was the business that hires minorities over nonminorities if they have the same qualifications. In the situation there were ten people applying for a job, nine of which were white and the other one black. The list was narrowed down to two people. One was white and the other was black. The company ends up hiring the black person because they are the minority. Although all nine of the white people were turned down, only one was effected by the policy to hire minorities over nonminorities. Some situations do not seem to have a right or wrong answer but looking at things economically can make an answer better than the other.