Came across an interesting article that discusses Christmas gift giving from the perspective of economists. Why bother giving a $100 gift to someone who will only appreciate it at $50? There is a loss of half of a Christmas gift, can we not maximize our gift giving by taking care of that deadweight loss?
Turns out an economist has contemplated the best way to maximize gift giving and minimize deadweight loss. Check out some of the articles on the topic from UPenn and Freakonomics, and a link to the actual paper (JSTOR)
Both the House and the Senate have passed separate versions of the new health care reform bill; online insurance quotes will be more competitive now. The Senate’s version of the new health care reform bill passed with a strong 60/39 count.
New initiatives for reforming the healthcare industry will soon affect the online insurance quotes that you receive from major healthcare insurers.
President Obama’s plan for American health care reform continues to gain positive ground. Last week, at 7:00 AM on Christmas Eve, when the Senate’s version of the new Health Care Reform Bill went up for vote, it needed a basic majority of 51 votes to be passed – and it took only about 5 minutes to receive them. The final vote count was 60/39 in favor of passage. This impressive victory was the result of the second longest deliberation period in the history of the Senate: 24 straight days. Now, both the Senate and the House of Representatives have passed separate versions of the final Health Care bill.
Wishing you and yours a Happy New Year! All the best in 2010. We will be here for another year adding great content to our economics and personal finance blogs, and news and articles in our econ forums.
When we describe GDP movements over the very long run we are concerned with economic growth over long periods of time–obviously. We use the production function with variable labour capital and technology, and consider issues such as what will change the rate of growth of output over very long periods. For this we would use the first diagram in the mid-term. The model that goes with this is AD-AS when the vertical AS curve is shifting outwards, as in Figure (b) below. Because the factors of production are increasing, the full employment level of output is increasing. Since economic growth over the very long-run averages a few percent per year, we know that the AS curve typically moves to the right by a few percent per year.
In the long run, we assume that capital and technology are fixed. Therefore, the AS curve is still vertical, but not moving, as in Figure (a). In Figure (a) we show the long run, where we assume that factors of production are fully employed but not changing, and the AS curve is vertical at the level of full employment output. Therefore, in the long run output is determined by aggregate supply alone. For a given AS curve, the price level is determined by the ‘level of aggregate demand. If AD were to increase, the price level would increase, while the level of output would remain constant. This model would describe the GDP movements in the second diagram in the mid-term, where the long run growth rate is flat.
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The assumption of diminishing marginal product of labour means that, in order to work more, workers must be offered a higher real wage. We can use this assumption to derive the labour demand curve.
This concept, the amount that output increases for a unit increase in labour input, is called the marginal product of labour (MPN). The MPN is given by the slope of the production function. This means that as labour use increases the amount of extra output that is gained from an increase in labour input becomes smaller. This is known as the diminishing marginal product of labour.
Given the diminishing marginal product of labour, if we graph the marginal product of labour against labour use, we would have a downward sloping curve. THis is illustrated in the figure below.
When we consider the Savings-Investment model what happens when the government runs a budget deficit and how does this impact the real rate of interest and savings (private)?
To explore this question we have to revisit the GDP model of Y = C + I + G + NI but ignoring net exports so we have Y – C – G = I. We will also explore this graph that assumes savings from consumers has increased.
This article will cover several popular questions first time investors post. To start, here is question number 1: How much money is enough to retire/invest? Good question, have ever consider this while thinking how you will reach your financial goals.
If only i could get a raise, or a better paying position, I could invest.
If only my spouse could get work.
If only my spouse could get a better paying job or a raise.
Maybe I should get a second job.
Life would be so much easier if I had a bit more money.
Haha, I liked the last one best. Frankly, consumerism in western culture has knocked some stupid in peoples heads. More and more advertising, etc., coupled with our own personal appetite for turning ‘WANTS’ into ‘NEEDS’, makes the desire for more money without end.
So does having more money make financial planning easier? Let’s answer this question with a series of questions.
Insurance is one of the aspects of life that you hate to pay for and given the choice you wouldnâ€™t bother. In fact, many Americans choose not to purchase any form of insurance when given a choice. Take for example healthcare, travel, life, and so on. Granted, most would purchase insurance in some cases (such as healthcare) if it was affordable to them, but the fact remains, if itâ€™s not mandatory, insurance is not our first option to spend our money.
One of the forms of insurance that is mandatory is car insurance. There are a variety of different forms of car insurance that ranges from comprehensive packages covering damage to both yourself and others involved in an accident, vandalism, theft, and so forth. The list goes on with what you can cover but most people will at some point opt for the mandatory minimum level of coverage in order to drive. Continue reading this article »
After the three brief articles on the Alberta oilsands, we thought it would make sense to post a video speaking about the other side of the energy market, the impact on environment and future generations. This is a brief yet poignant summary on what’s in store for future generations in Alberta. Today we’ll make a buck, tomorrow we’ll have a legacy of destruction to recover from.