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Prices: the marketplace’s communication system
Remember when airlines started charging for checked bags? What happened to the number of checked bags after this added charge? And what happened to the availability of in-cabin storage space on planes? This month?s newsletter answers these questions and discusses the pivotal role price plays in a market economy.
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Teach One, Reach Many
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Why scarce resources are sometimes unemployed
The unemployment rate always seems to be in the news, but did you know there are different kinds of unemployment? There is the natural rate of unemployment; cyclical, frictional, and structural unemployment; plus underemployment. Read the October 2013 Page One Economics Newsletter, ?Why Scarce Resources Are Sometimes Unemployed,? to learn the differences.
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The global economy: it's a small world after all
To understand why people trade, suppose you were limited to consuming only items you could find within walking distance of your house. Or, perhaps even worse, only items you could produce yourself. For most of us, this restriction would severely diminish the variety of goods and services we enjoy on a daily basis. Therefore, the simplest answer to the question is that people (or entire countries) trade because they will enjoy a wider variety of goods.
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Making sense of the ups and downs of prices
"Back in my day, a gallon of gas cost a quarter!" Has your grandfather ever said something like this to make a point about how expensive things are now? The price of gasoline indeed used to be much lower. In fact, the price of gasoline has risen from a little over $1 per gallon in 1992 to a little over $3.50 per gallon 20 years later.