Plain Sense Economics

This post will be useful in the fall, when I hold a Principles of Microeconomics class. In that class we take a look at the market for labor, including productivity. We know that if we add a production input, like labor, but hold other inputs (like capital equipment) steady, that marginal improvements to output will [...]

In microeconomics, after we’ve had a chance to think through the implications of economic players acting in their own self interest, we take a peek at game theory. One classical example of game theory is the prisoner’s dilemma. Wikipedia describes it here. And then, on Bachelor Pad’s concluding show you can see it in action [...]

Esther Duflo teaches economics at MIT, and is this year’s recipient of the John Bates Clark medal to an American economist under the age of 40 who is judged to have made the most significant contribution to economic thought and knowledge. From an MIT web site:
Duflo, a 37-year-old native of France, is the Abdul [...]

For my Principles of Microeconomics students there is an interesting article in The New York Times about gas prices and miles driven each year. In a rough way this is like a demand curve – price on the vertical axis, and quantity (in this case miles driven) on the horizontal axis. A comment from the [...]

As a followup to my earlier note on Oregon’s Measures 66 & 67, we need to take a quick look at some of the theories and rationale behind government taxes. This isn’t and can’t be an exhaustive discussion, but hopefully it is a start for our considerations. For SOU students I commend to you my [...]

In his best selling principles textbook, Prof. Mankiw outlines 10 fundamental principles of economics.
Here is the rap version, for your entertainment. The player below gives a teaser, with a link to the full version, which is free to listen to.

Demand, Supply – Rhythm, Rhyme, Results

Gregory Mankiw posted this question on his blog:
You are a utilitarian social planner. You have a limited number of H1N1 vaccines. How do you allocate them? Do you (A) give them to specific groups, such as high-risk populations, or (B) sell them to the highest bidder and rebate the revenue lump-sum to everyone? If you [...]

This post from the Freakonomics blog has a nice little description of fixed and variable costs, as applied to hot dog vendors in New York City.
A Slate article mentions that the annual price of a hot-dog stand license near the Metropolitan Museum of Art in New York City is $362,201. Licenses are very limited and [...]

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 post in Freakonomics is cool. Why kiwi fruit is cheap in New York City and other market imponderables.