5 votes
Accepted

Who really pays transaction taxes like VAT or sales tax?

The issue you are asking about is tax incidence. This Wikipedia entry provides a good introduction. In short: it depends on how easily supply and demand respond to price changes relatively to each ...
user avatar
  • 276
4 votes

Does neoclassical economics explain or assume private property rights?

It is true that mainstream economics (which includes neoclasicall economics) is empirical but note that any explanation can only arise from theory (whether theory is explicitly formulated or only ...
user avatar
  • 43.6k
4 votes

Why is bargaining more common in poor countries?

In first world countries, the price of a bottle of water is set by a well-established market. There are millions of prospective buyers of a bottle of water and thousands of prospective suppliers, and ...
user avatar
3 votes
Accepted

What counts as transactions fee in Coase Theorem?

Transaction costs (or fees, though I have always heard it as costs) is anything that complicates or prevents a transaction. This includes the example you are suggesting, but also things like the costs ...
user avatar
  • 4,158
2 votes

Why is bargaining more common in poor countries?

Time is money When the average daily wage is 5 dollars, and many others survive on 1-2 dollars a day, it's worth it to many people to take a few minutes to try to get an extra nickel or dime out of ...
user avatar
  • 636
2 votes

Why is bargaining more common in poor countries?

I think the best approach to describe this phenomenon is to see it as a change from relational-oriented economics of poor countries (developing countries) to transactional-oriented economics of ...
user avatar
  • 452
1 vote

What is the purpose of a congestion tax with refund?

Pigouvian taxes are actually supposed include some tax returns because they are supposed to be revenue-neutral. The point is that the tax still distorts the incentives to purchase 'dirty' good. Unless ...
user avatar
  • 43.6k
1 vote

Why does the transportation of commodities yield a profit but that of gold and silver doesn't?

As I read Smith this was because gold and silver were used as currencies. So in Smith’s view you do not earn profit on settling your accounts you earn profit on resale of what you imported or from ...
user avatar
  • 43.6k
1 vote

Which mathematics are required for fully understanding the theories of the firm?

I haven't gone through all the papers so I just sampled 'The Firm as an Incentive System'. Browsing through it, it relies on Linear Algebra and Real Analysis. Again, I warn that I have not gone ...
user avatar

Only top scored, non community-wiki answers of a minimum length are eligible