One sentence in my textbook triggered my attention: “Attempts to remove subsidies on basic foods or fuel in countries like Iran, Venezuela or India have caused major riots in the past. This led to an exploration into India’s fuel subsidies.Read more
I always feel bored when reading about public and private goods in an economics textbook. The reason is the topic is generally covered by fencing off both concepts, using the concepts of rivalry and excludability. It lures us into hairsplitting, whereas in my opinion, what makes the distinction between public and private goods, is of a political nature.Read more
The Daily Mail covered a story on the sale of cat and dog meat in Indonesia. The trade has officially been banned but the ban has not been succesfully enforced on the market covered in the article. Cats and dogs are killed in plain view of the public, including children, and the methods used are devastating.
1. Animal abuse is an externality of the meat industry. Explain.
2. Do you think a ban on dog and cat meat will root out animal abuse related to meat consumption?
3. Can you think of other options to deal with animal abuse in the meat industry, besides a ban?
A popular example of an externality is road congestion, this is not different in my current textbook. We tend to look at the direct and indirect costs involved with road congestion. But at which markets is this externality pointing?Read more
I am happy to see that the EdExcel specification puts the neo-classical assumption that men is rational to question. My textbook mentions three reasons why men may not behave rational: social norms, habits, and weak computational skills. It does not cover that people may not end up with a rational decision because of empathetic considerations.Read more
In this post, I focus on subsidies. The author of my textbook uses the model of supply and demand to analyse the effect of a subsidy on both supply and demand. He takes the perspective of a subsidy that falls to the supplier. But not all subsidies fall to suppliers, subsidies like housing benefit or subsidy on solar panels fall to buyers. I wondered if an analysis from the perspective of the buyer would give another result, all other things equal.Read more
Question: What are the costs of the supply of rental housing?Read more
Question: To dynamically charge vehicles, it is probably enough to electrify the stretch of 20.000 km of highway in Sweden. Would 20.000 km of electrified road be a public or a private good?Read more
When we look at the economy as a system, markets are subsystems. From this perspective, the price mechanism describes how some elements of the market system interact with each other. But what is the purpose of a market?Read more
I have arrived at the price mechanism, how excess in demand drives prices up, and excess in supply drives them down – under normal circumstances and with everything else unchanged -, to end up at an equilibrium price and quantity cleared. But what happens to the excess supply, or the excess demand?Read more