Clik here to view.
Increases in CPI: Good or bad?
One of the nice things about WordPress is that I get a nice summary of the search engine terms that led people to my page. Bobby Bonilla is popular, as always – it’s nice to know that people are...
View ArticleClik here to view.
Really Interesting (Or Nominally Interesting, At Least)
Interest rates describe how much money you’ll have at the end of a year if you lend to someone. Mostly, you “lend” money to a bank by putting it in a savings account, but you might lend to the...
View ArticleClik here to view.
Scribbling in the Margins
3. Rational people think at the margin. That’s one of Mankiw’s Ten Principles of Economics. (#3, in fact). What does it mean? The usual definition of “marginal” is “additional.” In other words, the...
View ArticleClik here to view.
It’s For The Public Good
There are several types of goods in economics: private goods, public goods, club goods, and common goods. What defines which category a good will fall into? The category can be determined knowing two...
View ArticleClik here to view.
When is a filibuster not a filibuster?
A filibuster is a legislative technique where a lawmaker who is in the minority will block passage of the bill. Historically, that required talking continuously on the legislature floor, as that would...
View ArticleClik here to view.
Perfectly Competitive Markets
When solving economic problems, the type of firm you’re dealing with can lead you to use different techniques to figure out the firm’s rational choice of action. This week, I’ll set up a thumbnail...
View ArticleClik here to view.
Monopolistic Markets
Continuing our whistle-stop tour through market types, today’s topic is monopolies. Yesterday’s discussion was of perfectly competitive markets, where three conditions held: Identical goods Lots of...
View ArticleClik here to view.
Duopoly and Cournot Equilibrium
A few days ago, we discussed perfectly competitive markets; yesterday, we talked about monopolistic markets. Now, let’s expand into a case in between – a duopolistic, or two-seller, market. This is...
View ArticleClik here to view.
Evaluating Different Market Structures
Market structures, like perfect competition, monopoly, and Cournot competition have different implications for the consumer and the firm. Measuring the differences can be very informative, but first we...
View ArticleClik here to view.
Don’t Discount the Importance of Patience
Uncertainty is one explanation for why interest rates vary. Tolerance for uncertainty is called risk aversion, and it can be pretty complicated. (We’ll talk about it a little bit later on.) Another big...
View ArticleClik here to view.
The Good and Bad of Goods and Bads
When students first hear the word “goods” pertaining to economic goods, they sometimes find it a little funny. When they hear some sorts of goods called “bads,” they usually find it ridiculous. Let’s...
View ArticleClik here to view.
The Do-Nothing Alternative
Consider the following situation: You are at a casino. You have a crisp new $100 bill in your pocket and an hour before your friend arrives. There are several options available: blackjack, poker, and...
View ArticleClik here to view.
Elasticity and Demand
The price-elasticity of demand measures how sensitive consumers are to changes in price. There are two primary formulas for that. Most commonly, introductory courses will use , where means the...
View ArticleClik here to view.
Diminishing Marginal Returns
Close your eyes. Well, finish reading the next paragraph first, and then close your eyes. I am going to offer you unlimited access to something good, something useful, something tasty. That’s right –...
View ArticleClik here to view.
Price Discrimination
I wear my hair short. Like, really short – it’s buzzed on the sides and scissor-cut on top, so that it’s low-maintenance, and I trim my own beard using a storebought clipper. My father-in-law does the...
View ArticleClik here to view.
How do producers charge different consumers different prices?
Price discrimination is the act of charging different consumers different prices based on how much they’re willing to pay. There are a few different forms of price discrimination, and it can be...
View ArticleClik here to view.
Faculty Freebies and Price Discrimination
Despite its nasty-sounding name, price discrimination is interesting and beneficial to some consumers. (Of course, when we move away from equilibrium to make someone better off , we usually make some...
View ArticleClik here to view.
You were looking for what? (Or, search term questions.)
Occasionally I mine the search terms for interesting questions. Here are three from the past month: What is an increase in CPI? When a country’s CPI increases, that means that, on average, the cost of...
View Article