Plain Sense Economics

I love the cheese, the crust, and most of the other, assorted things that can go on a pizza. Sadly, many of those things are not good for me. This article, put out by Reuters, reports on a study measuring the impact of a tax on pizza on the number of pizza and soda calories [...]

With a tip to the Freakonomics blog we learn that there is a stronger market for pressure cookers in The Netherlands. The likely reason – the higher cost of electricity there. Pressure cookers are, apparently, energy savers – I guess by reducing cooking times. Electricity in The Netherlands is not subsidized nearly to the extent [...]

This report on NBC News tonight highlighted the impact of a recent increase in Federal taxes on cigarettes and chewing tobacco.

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The report mentions an estimate that a 10% rise in cigarette prices results in a 7% drop in smoking among youth and a 4% [...]

In another post we talk about the concept of price elasticity – which measures how responsive consumer demand is to a change in price. The general elasticity approach can apply to supply (reaction of suppliers to a change in market price) and income (change in demand as a reaction to a change in consumer income).
Another [...]

In the discussion of demand and supply we noted that demand for a product is chiefly determined by its price. For almost all products the demand curve slopes down and to the right – with a negative slope. The shape of the typical demand curve tells us that demand is inversely related to changes in [...]