The Unbroken Window

Did you ever wonder why some units of produce are priced per unit while others are priced per pound? For example, the cucumbers here are priced generally a 99 cents each, or more if they are enormous. Corn is priced at 4 per dollar or 5 per $2.00 or some other per unit price based [...]

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Orthodox Keynesians argue that in times when aggregate demand is slack, it makes no difference whether you employ people to dig holes and fill them back up or whether you actually pay people to produce public goods that are valuable. Suppose we accept this proposition – that it doesn’t matter just so long as the [...]

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The AP reports today that:
ATLANTA (AP) — About a quarter of the swine flu vaccine produced for the U.S. public has expired – meaning that a whopping 40 million doses worth about $260 million is being written off as trash.
“It’s a lot, by historical standards,” said Jerry Weir, who oversees vaccine research and review for [...]

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A simple presentation of the Alchian-Allen theorem is that if you take two goods with different prices and you add a fixed cost to each of them, then the “more expensive” good becomes relatively less expensive. Here is a simple illustration:
Suppose we have two types of booze: White Lightning Bourbon, which costs $8.00 per fifth, [...]

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Big surprise that I am in the camp who would argue no. What’s my major defense? Aside from the common argument that trading on inside information would seem to make markets “more efficient,” there is quite another approach to this.
The opposition to insider trading believes claims that when I as an insider trade on information [...]

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A popular view of minimum wage increases is that they “spiral up.” In other words, when the minimum wage is raised from say $5.15 per hour to $7.25 per hour, employers will increase the wages of low-wage workers, which will then subsequently force the wages of other workers up and wha-la … everyone is richer [...]

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Few things frustrate me more than participating (or not) in “markets” where there is pricing inflexibility.Many of you I suspect hold a sour place in your hearts for ticket scalpers to sporting events. It is not clear why, however. Think about the service that scalpers provide. When there are more people interested in going to [...]

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Mark Perry channels Gary Becker.
As the recent all-male coal mining deaths in West Virginia illustrate, a disproportionate number of men work in higher-risk occupations that are typically compensated with higher pay like coal mining (almost 100% male), fire fighters (96.6% male), police officers (84.5% male), correctional officers (73.1% male), and construction (97.4% male), BLS data [...]

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One of my bright students asked me a question that roughly goes like this: “What is the true definition of compulsory?”
What could he possibly mean by that? Isn’t it obvious? Perhaps not. Consider two strategies a government can use to deal with a situation where lots of customers want to use a resource, but there [...]

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Not really.
A student of mine forwarded this Yahoo finance piece to me:
Are you infuriated every time you open your cell phone bill? Livid when you buy a snack at the movies? These are some of the rawest deals around.
…
Movie Theater Popcorn — 900% Markup
A medium bag of popcorn costs just 60 cents to make but [...]

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