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February 10, 2012
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David G. Savage: Why activists may not be in a hurry to have High Court rule on alternative marriage
February 9, 2012
Laura McMullen: 10 Least Expensive Public Schools for Out-of-State Students
Kimberly Palmer: How to actually enjoy -- relaxing, financially -- your vacation
February 8, 2012
Warren Richey: Why momentous Prop. 8 ruling might not satisfy gay-rights groups
Menachem Wecker: Though Controversial, LL.M.'s Can Lead to Specialized Legal Jobs
The Kosher Gourmet byDana Velden: Going to the bother of making soup? You know it better be good. This CREAM OF TOMATO SOUP certainly is! And it's a cinch to make, too (Includes techinques and serving secrets)
February 7, 2012
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Jeffrey Fleishman: In newly democratic Egypt, tens of democracy activists jailed, to stand trial; their groups are 'threatening the stability of the homeland'
Julie Deardorff : Researchers say antioxidants may not be that effective and could do more harm than good
Mark Clayton: How did Anonymous hackers eavesdrop on FBI and Scotland Yard?
February 3, 2012
Edmund Sanders : Israeli official says Iran is creating missile that could reach East Coast of US
Victoria Kim: Immigrant-smuggling ring used black drivers to avoid racial profiling
February 2, 2012
Jim Carney: Wrong number call may have saved her life
Reza Kahlili : Ex-CIA spy in Iran's Revolutionary Guard: What Obama doesn't grasp about striking deals with Tehran
Tina Susman: For woodchuck rescuer, every day is Groundhog Day
February 1, 2012
Brian Bennett: US officials see increasing threat of domestic attack from Iran
Emily Brandon: How to Take Advantage of New 401(k) Fee Disclosures
January 31, 2012
January 30, 2012
Paul Richter and Ramin Mostaghim: Misreading Teheran's limits -- deadly and economically devastating as they may be -- is a risk administration, Europe seem willing to take
Suzanne Bohan: Warning: Nap-deprived tots missing more than sleep, study finds
Meg Handley: Banks Revamping Rewards Programs to Woo Customers
January 27, 2012
Caroline B. Glick: Obama: Of course I intend to prevent a nuclear holocaust . . . in a few months
Yochonon Donn: In liberal New York City, fervently-Orthodox Jews may soon be getting a district to call their own
Jeannine Stein: An inflated ego and thinking you're 'all that' doesn't just make others sick of you, it can make you ill
Katy Hopkins: New budget rules may affect how much money you get for college
January 26, 2012
Ed Koch: To the New York Times, calling for the murder of Jews by those capable of having their incitement taken seriously isn't news
Jeannine Stein: Mental illness struck one in five U.S. adults in 2010: Report
January 25, 2012
Richard Simon: House passes two bills endorsing the use of religious symbols at military memorials
Fred Weir: Putin: Multiethnic Russia cannot survive as a US-style 'melting pot'; must find its own way
Susan Johnston: 5 Sneaky Coupon Strategies Consumers Should Watch Out For
January 24, 2012
Carol Clark: The price of your soul: How your brain decides whether to 'sell out'
Caroline B. Glick: America lost most in 'Arab Spring'. Sadly, many voters still don't grasp the extent
Warren Richey: Drug criminal scores win in GPS ruling from conservative-leaning high court
Erika Bolstad: Black conservatives gather to talk about gaining strength
January 23, 2012
Melissa Dribben: Jewish voters to play a key role in Florida's Republican primary
Jordan Rau: In quest to grow, Catholic hospital system will announce this morning its break from church
Ali Safi: U.S. envoy gives Taliban terms for peace talks
January 19, 2012
January 18, 2012
January 17, 2012
Frank J. Gaffney Jr.: No-kidding red lines: U.S. response to an Iranian nuke may be bluster, but Israel's won't be
David G. Savage: They sued their principals after slandering them online --- now the cases are headed to the Supreme Court
David Francis: Where to Invest in 2012: With stocks expected to rebound, opportunity abounds for investors
January 13, 2012
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Alexia Elejalde-Ruiz: Thriving through touch: Gentle massage helps older people with low mobility improve in mind and body
January 12, 2012
Warren Richey: Landmark Supreme Court ruling a 'resounding win' for religious groups
Warren Richey: Supreme Court says no to new rule on eyewitness testimony
John Fauber : Statins found to raise diabetes risk in postmenopausal women
Katy Hopkins : Consider This Before You Pay for an Online Degree
The Kosher Gourmet by Joseph Erdos: This mushroom and barley soup has an intense -- almost nutty -- flavor that mixes robust with Middle East. It has creaminess without cream
January 11, 2012
Shari Roan: Millions of atrial fibrillation sufferers at risk for devastating, but preventable, stroke
Tom Hussain: Pakistan -- recipient of more than $21 billion in civilian and military aid -- speeds pursuit of Iranian pipeline, defying US
David G. Savage: High court signals it won't be loosening TV's 'indecency' rules
Stephen Ceasar: Oklahoma's Islamic law amendment can't go into effect, court rules
January 10, 2012
Reza Kahlili: From an ex-CIA spy: US must exploit new split in Iran's Revolutionary Guard
Karen Kaplan: Study: Nicotine replacement products ineffective when used in real-life situations
January 9, 2012
Michael Doyle: Put through legal hell over dream home, couple fought back hard --- all the way to Supreme Court
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Jewish World Review
Jan. 25, 2005
/ 15 Shevat, 5765
Economics for the citizen
By
Walter Williams
Part Five of a Ten-Part Series
http://www.JewishWorldReview.com |
Someone might have made you a gift of this website. Does that mean
reading this article is free? The answer is a big fat no. If you weren't
reading the article, you might have watched television, talked to your
wife or worked on your homework. The cost of having or doing something
is what had to be sacrificed. While reading this article might have a
zero price, it most assuredly doesn't have a zero cost.
To reinforce the idea that price is not the full measure of
cost, imagine that you live in St. Louis, Mo. The barber who cuts your
hair charges $20. Suppose I told you that a barber in Charleston, S.C.,
would charge you $5 for an identical haircut. Would you consider the
Charleston haircut cheaper? While it has a lower price, it has a much
greater cost. You'd have to sacrifice much more in terms of time, travel
and other expenses in order to get the Charleston haircut.
People often erroneously think of costs as only material
things, but that which is sacrificed when a particular choice is made
can include clean air, leisure, morality, tranquility, domestic bliss,
safety or any other thing of value. For example, a possible cost of a
night out with the boys might be the sacrifice of domestic bliss.
Costs affect our choices in many ways, and for the purposes
of this discussion, we're going to assume that all of the costs
associated with a given choice are borne by the chooser.
Just about the most important generalization that we can
make about human behavior is that the higher the cost of a particular
choice, the less of it will be chosen, and the lower the cost, the more
of it will be chosen. This generalization underlies the law of demand.
For simplicity, let's assume price measures cost while we hold
everything else influencing choice constant.
The law of demand can be expressed several ways: The lower
the price of something, the more will be taken, and the opposite is true
for the higher price. We can also say there exists a price whereby one
can be induced to take more or less of something. Finally, there's an
inverse (reverse) relationship between the price of a good and the
quantity demanded.
Why do people behave this way? The answer, in a word or two,
is that people try to be as happy as they can. For example, if when the
price of oil rises, people simply ignored the price increase, they'd
have less to spend on other things and be less happy. If they sought
substitutes for the higher-priced oil, they'd have more money left over,
and they'd be happier. That's why higher oil prices give people
incentive to purchase more insulation, buy better windows, wear sweaters
and maybe move to a warmer climate. These choices, and many more, are
substitutes for heating oil, allowing you to use less oil.
When people say a certain amount of one thing or another is
an absolute must, that's like saying the law of demand doesn't exist and
there are no substitutes. That's untrue — consider a diabetic. Can he
do without 50 units of insulin a day? The law of demand says that at
some price, say at $1,000 a unit, he can. There's always at least one
substitute for any good, and that's doing without the good altogether.
In the diabetic's case, no insulin.
While not having insulin has unpleasant consequences, it's a
likely substitute at $1,000 a unit. You say, "Williams, that kind of
economic analysis is cruel!" It's no crueler than the law of gravity
that predicts that if you jump off a skyscraper you're going to die.
Both outcomes are unattractive, but it's reality. Indeed, tragically,
millions of our fellow men around the globe are forced to endure the
unpleasant substitute for insulin.
In the next discussion, we'll explore some interesting
features of cost, choice and the law of demand.
Every weekday JewishWorldReview.com publishes what many in uplifting articles.
Sign up for the daily JWR update. It's free. Just click here.
Walter Williams Weekly Column Archives
Economics for the citizen, Part Four
Economics for the citizen, Part Three
Economics for the citizen, Part Two
Economics for the citizen, Part One
© 2005, Creators Syndicate
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