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16

There is a good Planet Money episode on ticket scalping; I recommend it. The reason for banning ticket scalping has nothing to do with economic harm, and everything to do with making the arts (or sports, whatever) accessible to people of more-modest means. Consider the fact that artists could, if they wanted, just auction off all the seats to their shows, ...


9

"Surplus recycling" is a term coined (to my knowledge) by Varoufakis to describe the fact that a country that enjoys a trade surplus should reinvest the surplus in the domestic economies of its trading partners. Such a policy was conduced with success by the United States in the years following WW2, where the Marshall plan and similar policies in Asia took ...


5

This is an answer to the closely related question of "why don't competition/antitrust authorities aim to maximise total welfare rather than consumer surplus?" There are a number of reasons for this: If there are a small number of firms participating in a market then they have a very concentrated interest in that market and therefore have a large incentive ...


4

Surplus and welfare are different concepts, but not for the reasons you state, although there are elements of validity in both (1) and (2). They may, however, be used interchangeably in certain contexts and where certain conditions are met. Both “surplus” and “welfare” are terms from ordinary language that in economics are used in more precise senses. "...


3

You are certainly wrong regarding surplus, which is measured in dollars, not in units of welfare. In particular, according to the definition you've given, surplus depends on the choice of welfare function $W$, whereas in fact surplus is independent of that choice (and indeed the concept of surplus makes perfectly good sense in the absence of any welfare ...


3

Since we are not trading with aliens (yet), you are right in assuming the global account balance ought to be zero. Your data contradicts this because it is collected by numerous statistical agencies who differ in their capability and their methods. Examples for different outcomes could arise from: different degrees of border control. The fact that an export ...


3

The question is belied by some basic misconceptions. Just to list a few: The comparison of GDP in nominal terms and implied statements about growth. The definition/measurement of GDP (where saving is apparently not part of GDP). The (completely) arbitrary prices of goods being prescribed for this economy. The meaning of equilibrium. John produces 100kg ...


2

You dont even have to have money or other people to make transactions with to save. In economics savings is a proportion of your output/income that is not consumed. For example, you can have a Robinson Crusoe on an island all alone and he can save. An example, Crusoe will collect 10 pieces of wood uses 5 for fire and other 5 are left for later. That is by ...


2

At the national (macro) level in a closed economy, total savings must equal total investment. Total savings are total output - total consumption. If there is no "savings technology" with a depreciation rate below 100% in your economy then there can be no savings. I.e. there has to be a way to store things without losing 100% of what you store. Can John ...


2

It is my impression that the fact that "scalping tickets" is considered illegal (or at least restricted) in many parts of the world, may be due to the following reasons: A) Transactional: A ticket has a consumer price printed on it. This means that the supplier of the service has announced/committed to a price at which he is willing to provide the service/...


1

It may help to forget money for a moment and focus on real goods. What saving ultimately means is that by working harder now, people can gain more leisure in the future. If the only goods are perishable foodstuffs, then indeed net long-term saving is impossible. People will have to do just as much work in the future to feed themselves, regardless of how much ...


1

Two answers: How trade is recorded: exports are recorded as FOB (Free on board), whereas imports are recorded as CIF (cost, insurance and freight). Re-exports. Essentially this is double counting of exports. For instance, Hong Kong and Belgium have high values of exports relative to their production, but that is because they are intermediate destinations ...


1

I am currently reading the book and came across the surplus recycling mechanism. To my understanding, the reason behind his use of the term was linked to the imbalance in trade and in capital cash flows of one region vis-à-vis another. More specifically, he talks about the SRM as being another alternative to tackle trade deficits in poorer regions. As an ...


1

never work on weekends :-) What you really do here is to find the total surplus in terms of $Q*$ and then maximise it setting the derivative to $Q*$ equal to zero. So, you just maximise $$TotalSurplus = - \frac{3}{16}Q^{*2}+\frac{9}{2}Q^{*} + 2 * Q^{*}$$ for $Q*$ and you obtain the expected results.


1

Market Equilibrium occurs when the difference between demand and supply is minimized. Equilibrium price and quantity is determined by solving this problem. Surplus Maximization (or efficiency) is a property that we would want equilibrium to have. First Welfare Theorem says that in competitive markets (in the absence of externalities) market equilibrium is ...


1

This question is oddly phrased. The main marxist thesis about profit is that firms can't profit from technology, but ultimately profit comes from exploitation of human labor, i.e. by extracting surplus value from workers. In marxism, profit always comes from "living labor", in the sense that the price of a commodity both reflects the technology used to ...


1

I'm going to look more generalized at the producer's side of things. Either the producer wants to use price discrimination to maximize his own profits. In that case, earlier tickets may be cheaper, and later bought tickets are more expensive. Then, all tickets scalpers do is reap the producer surplus. It would be similar to a student buying items at student ...


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