Food and energy prices are notoriously volatile and make it difficult to read consumer price indices. But why are they so volatile? Why are things that we buy everyday in relatively constant quantities so volatile in their prices? Well, it's all explainable by looking at the price elasticities and the slopes of the supply and … Continue reading Why Are Food Prices Are So Volatile?
I know I've been posting mostly about macro and banking lately, but here's one for the micro students. Let's look at how a community college could collect more revenue while lowering the cost of education for students. We studied about how there's a relationship between the demands for any two products. Suppose we have product … Continue reading Economic Alchemy: How to Raise Tuition but Lower Student Costs
Another former student asks: http://finance.yahoo.com/career-work/article/108119/the-accidental-hero.html?mod=career-selfemployment Am I missing something here? What's so remarkable about realizing that quantity demanded rises with a decrease in price? Are they just that dumb? Well, no you're not missing anything here, but obviously the reporters and possibly the Subway managements missed something in their Principles of Economics classes. Actually they … Continue reading News flash: Basic Economics Surprises Reporters