BBRG: Data Picks Investments, Stories Sell Them
I want to try something as little different today, describing the story behind a column. Almost none of the text in this post is found in my Bloomberg column today. Not too long ago…
Building Demand
The Foundations of Demand Curves Changes in the price of a good cause the budget constraint to shift, and new indifference curves to form. In this way, the logical foundations…
Understanding Consumer Theory
If we think about the indifference curves in a slightly different way, we see that MRS describes marginal benefit. Since MRS represents the maximum amount of y we are willing…
Tariffs
A tariff is defined as a tax on imported goods. The easiest way to show how it works is with an example. Below, we have continued the example from the…
Quantity Controls
We looked at an example of the government regulating prices, and concluded that a deviation from the equilibrium quantity is what causes a deadweight loss. What if the government regulates…
Calculating Market Surplus
To find out the impact of government’s price ceiling, we must calculate market surplus before, and after a policy. This method will be an important gauge for all our policy…
Relative Elasticity
Perfectly Elastic and Perfectly Inelastic To begin the conversation about relative elasticity, it helps to first look at the extremes. Perfectly Elastic Imagine a product where if the price increased,…
Elasticity and Revenue
Elasticities can be divided into three broad categories: elastic, inelastic, and unitary. An elastic demand is one in which the elasticity is greater than one, indicating a high responsiveness to changes in…
Quantity Controls
We looked at an example of the government regulating prices, and concluded that a deviation from the equilibrium quantity is what causes a deadweight loss. What if the government regulates…
