Plain Sense Economics

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.

In the March 30 edition of The New Yorker, David Owen makes a good point about the relationship between the economy and our environmental scorecard:
[T]he world’s principal source of man-made greenhouse gases has always been prosperity. The recession makes that relationship easy to see: shuttered factories don’t spew carbon dioxide; the unemployed drive fewer miles [...]

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 [...]

When we tackle the demand curve and the various determinants of demand, one of the influences we discuss is that of income. In a normal good, when income goes up demand for that good goes up. So demand for dinners at nice restaurants would be expected to rise as the economy (and people’s incomes) rises.
There [...]

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 [...]