I love my job. I believe that God has gifted me with the ability to teach. God has given me, I believe, not only the ability to convey information but also to make it interesting and memorable for students. I cannot imagine making a living doing anything else. I cannot imagine anything I would enjoy more. One of the first lectures I give in my Economics classes is about the different sectors of the economy and their conflicting goals.
I explain that, on the one hand, we have consumers. That would be you and me. Our goal is to maximize satisfaction. We do this through a process called cost-benefit analysis, CBA. It sounds more complicated than it is. In fact, everyone uses the process several times each day. It’s just that we don’t call it “CBA”. Cost-benefit analysis is the process of comparing the additional cost that I will have to expend because of a decision, versus the additional benefit I will get to enjoy because of that same decision. An example would be when Kelly and I went on our honeymoon cruise. My travel agent said that we could book a room in the bowels of the ship for one price, or get one with a balcony view for $1,000 more. (My initial question was something about whether these two rooms were on the same ship going to the same places!) I had to decide whether the additional benefit of sitting on the balcony, and sipping hot chocolate and watching Hubbard Glacier calve off into the ocean was worth the additional cost of $1,000.
On the other hand, however, we have producers. Their objective is to maximize profit. Profit consists of two elements, revenue and cost. Revenue is the amount of money earned by producers from the sale of goods and services. Costs are the expenses associated with running a business: rent, electricity, salaries, etc. In order to increase profit, a producer would increase revenue, or decrease cost, or some combination of those two procedures.
I then tell my classes the story of the first Thanksgiving Kelly and I spent together as a married couple. We spent this time with her family in Hiram, GA. We had a huge feast on Thursday evening, and I went to bed in a near comatose state. I slept well that night. I vaguely remember drooling on my pillow so much that I flipped it over in order to enter into the next phase of sleep. All of a sudden, prior to 5 AM my new bride jumped out of bed like she was being shot at! She left the house almost immediately. No coffee, no make-up, no nothing, just left. And she was gone all day!
You know what she was doing, right? She was shopping. This is the day we call “Black Friday”. Contrary to some, it did not come by this moniker from shoppers becoming black and blue fighting over great deals on consumer goods. It is called “Black Friday” because it begins that amazing time in the world of retail where producers move from loss to profitability. To use an accounting term, they move from the “red” into the “black.”
For me, the most intriguing part about this day and those ensuing is that both sectors of the economy are excited at the same time. Consumers are happy because they are maximizing satisfaction by getting great deals. We feel we are paying less and getting more in return. Businesses are excited because most of them generate more revenue in these few weeks, than in the six months prior! It’s a win-win. Both sides feel like they’re getting a great deal!