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Comment Re:A Strawman for the Symptom (Score 0) 723

"if it has no value to you, you won't mind not having it."

It is not necessarily true that just because you wouldn't pay the asking price that it has no value to you. You could value a movie at $1 but your only way of obtaining it is to pay $10. So it is then in your own interest to download the movie for free, but buying it would not be.

This is demand side of what many companies do when they charge people more in accordance with their ability to pay. In this way they are able to decrease consumer surplus while maximizing their producer surplus. A reasonable alternative would be to allow customers to pay what they want to pay BELOW the standard price, thus paying more to the producers yet allowing customers to have what they otherwise would not have bought.

Comment Re:The Magic 8 ball told me that a long time ago (Score 0) 540

The idea behind a stimulus is not necessarily JUST that it will help the people to whom it is given.

There is such thing as a government transfer multiplier which states the affect that a stimulus, like this, is equal to the original amount given times 1/(1-MPC). The MPC is equal to the ratio that a consumer will spend as opposed to save when they are given additional money. In America this is extremely high, somewhere around 0.9. This means whatever the amount given to the person, this will affect the GDP by 10x that amount.

This is because if the consumer gets $500, he will spend $450 which then goes to whoever made the good who then spends $405 and so on.

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