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Quote of the Day Krugman Edition

“Why do policy wonks who will happily watch hundreds of hours of talking heads droning on about the global economy refuse to sit still for the ten minutes or so it takes to explain [David] Ricardo?” So asked one famous economist in the mid-1990s, making fun of intellectuals who couldn’t grasp the great English economist’s concept of comparative advantage “with its implication that trade between two nations normally raises the real incomes of both.” Continue Reading →

U.S. Government Debt Revisited

Honestly, this material is not difficult and the data is readily available. I always have trouble understanding why people don’t simply look at the facts instead of trusting the media. Nearly everyone in the media, including most of those who report on economics, are illiterate about even the most basic economic concepts. Remember, their college degrees are in journalism or communications. Somewhere along the way an editor decided they knew some economics. They don’t. Continue Reading →

Monopoly Pricing in a Government Agency

I’ve been looking into detailed election results, specifically our local school district. There are 31 precincts. To save some time I thought I’d get the GIS maps. Imagine my surprise when I found out they would cost $86 per precinct! I wondered if this came close to the monopoly profit-maximizing price. Have I found monopoly pricing in a government agency? Continue Reading →

KPCC and the Supermarket Guru Jointly Fail

It seems to me there is a simpler and more direct explanation: demand. Higher prices for any product reduce quantity demanded. And for a specific item such as beef, demand elasticity is likely to be fairly high. The reason firms are not raising retail prices is simple: it would not be profitable because they would lose more unit sales than they would gain from the higher price. Continue Reading →