# Tag Info

• 9,330

### Why do companies and stores never seem to take into consideration the fact that few people want ugly colours of the same product?

Confirmation bias While there could be economic reasons for some of these phenomena, I think you are very likely experiencing confirmation bias. You are retelling personal stories that fit the ...
• 26k

### How does a reduction in consumer spending in favour of consumer saving, affect economic activity?

Such a "planned" and sought-after re-allocation of given income from consumption to saving, is justified only if the savings in an economy are sub-optimal (or we think so), in the sense of hurting the ...
• 31.8k

• 1,428

### Saturation of durable goods

"Durable goods" are a form of utility-generating capital. But they are capital, and what is actually generating utility is the flow of services from them, not them directly. So when we buy a durable ...
• 31.8k
Accepted

### What are some of the economic arguments for gender-neutral marriage?

tl,dr: I don't see an economic argument for GN marriage, or marriage in general what-so-ever. Frictionless environment All spending on marriage, are nothing more than consumption goods. There is no ...
• 10.4k
Accepted

### How does the GDP multiplier work?

The multiplier comes from the solution to the goods market equilibrium. In economics everything is endogenous. Increase in income increases consumption that increases demand, demand increases ...
• 41.5k
Accepted

### What would be the economic effect of widespread instances of individuals paying off consumer debt?

This left me wondering what happens to the wider economy when people decide en masse rather than spending their disposable income on consumer goods/services, to instead pay down their debt and save/...
• 41.5k

### What are the economic benefits of SLAPP in file sharing/piracy?

Background Since the marginal cost of distribution for a creative work such as a song is now essentially zero, the efficient thing to do would be to provide all songs to listeners at a price of zero (...
• 16.6k

Isn't this mostly an issue of pricing at a level where most people feel it's worth paying to avoid the hassle (and potential legal issues) of piracy? Take music singles for example: when I was a ...
• 131

### What are the widescale economic ramifications of people holding onto their money instead of spending it?

The amount that people save depend on the marginal propensity to consume (MPC), i.e., part of the additional income that a person consume, hence, $1-MPC = savingrate$. Keynes assumed that with ...
• 459

### How does a reduction in consumer spending in favour of consumer saving, affect economic activity?

As stated the Government successfully runs a campaign and people stop spending and start saving. Part of the answer depends on how they save, and the other part depends on how manufacturers react. ...
• 2,690
Accepted

### Effect of changing Non Labor Income on Consumption-Leisure problem

This has to do with the form of the utility function. Assume instead that,say, we had $$U(c,l) = c^{1/2} - \frac{1}{2}l^2$$ Does now $R$ affect the labor-supplied decision? Solve it and explore. ...
• 31.8k

### Precautionary Savings Two-Period model with a second period quadratic utility function

The two papers that explored first savings under uncertainty in a two-period setting are Leland, H. E. (1968). Saving and uncertainty: The precautionary demand for saving. The Quarterly Journal of ...
• 31.8k

### Preference for consumption smoothing and actual smoothing

The argument relayed in the question as regards consumption smoothing is flawed. Consumption smoothing does not mean consumption equality over periods, but rather, tendency to avoid corner solutions, ...
• 31.8k
Accepted

### Re-evaluation of Consumer Price Index (C.P.I.) weights

I don't think they are "sure", but the weights are based on the American Consumer Expenditure Survey which has a big sample size, a carefully chosen sampling frame, professionally executed sample ...
• 15.9k