Plain Sense Economics

In Microeconomics today we talked about how wages are set in part by the dollar value of the marginal product of labor (the incremental dollar value of adding one more worker) and the supply of those workers.
In his blog in October, Greg Mankiw pointed to a chart from PhDComics.com that is sure to warm the [...]

In microeconomics we talk about oligopolies – where a few number of competitors control a market. As long as these competitors do not coordinate prices or market areas, or otherwise conspire to keep other competitors out, they may legally operate in the U.S. On the other hand if they do conspire – collude – they [...]

A Pigovian tax (named after economist Arthur Pigou) aims to correct negative externalities. In plain-sense English this means that when a private market has a negative effect on others, a tax can sometimes offset that negative effect. The additional feature of a Pigovian tax is that it lets the private parties work out the best [...]

Paul Krugman writes in The New York Times today :
Suddenly, everything old is New Deal again. Reagan is out; F.D.R. is in. Still, how much guidance does the Roosevelt era really offer for today’s world? The answer is, a lot. But Barack Obama should learn from F.D.R.’s failures as well as from his achievements: the [...]

left on the back chalk board at the end of spring term…