When you ride alone you ride with Bin Ladin

[DuncanK]

Originally posted by Lawrence of Arabia


no problem. since firms dont know where the profit maximization point lies, they will almost always produce under that. that means that when you increase taxes and increase government spending, these firms will not continue to expand. this will lead to a less optimized economy, as the government takes over a larger portion of it and uses more resources to accomplish less.

Again, according to neo-classical theory the optimal use of scarce resources occurs when marginal costs equals marginal benefits. Deviations from this are market failure. And when you take this to macroeconomics marginal social costs must equal marginal social benefits or there is market failure. If firms and government can't produce at these points their theory is ****.

[DuncanK]

Originally posted by Imran Siddiqui

Consumers pay for this. Therefore it's not an externality.

Consumers pay for the benefits of improving the standard of living of all people in the reach of this oil based transportation? No, sorry, don't think so.

What the hell are you talking about? What benefits do you recieve if I drive to the beach?

[Lawrence of Arabia]

its called a model. models dont need to exactly represent something in order to accuratly predict an event.

[DuncanK]

Originally posted by Lawrence of Arabia
its called a model. models dont need to exactly represent something in order to accuratly predict an event.

You were just saying how inaccurate they are.

[Lawrence of Arabia]

the price maximization in a perfect competition market will still be MC=MR. unfortunalty, there is no perfectly competitive market in the world, and there is no way of accuratly gauging the additional cost of producing a unit. the model is still accurate as long as it is within those parameters, and it will show in which direction producers will go even if there is not a perfeclty competitive market. it doesnt predict things with perfect accuracy.

[DuncanK]

What I hear you two saying is that we can't even hope to come close to optimal production so just leave it alone.

[Lawrence of Arabia]

its better then giving it up to the government, which is even further from optimal production,

[DuncanK]

Originally posted by Lawrence of Arabia
its better then giving it up to the government, which is even further from optimal production,

I think not, but a more efficient system is in order regardless.

[Lawrence of Arabia]

economics is about relativity. there is no need to have a more efficient system as long as there is one system which is relatively more efficient.

[DuncanK]

Originally posted by Lawrence of Arabia
economics is about relativity. there is no need to have a more efficient system as long as there is one system which is relatively more efficient.

There is when you can't prevent your economy from funding your enemies without wrecking your economy.

[Lawrence of Arabia]

then destroy your enemies or dont make any.

[Skanky Burns]

The problem is those damn terrorists are greedy capitalists.

First they were funded by drugs, but now they have also expanded into oil, warez and mp3s.

[DuncanK]

You can do that with any system.

[Imran Siddiqui]

What the hell are you talking about? What benefits do you recieve if I drive to the beach?

I used to live in a town that was by the beach. You will drive to the beach and spend your money, giving money to the local economy making my town a better place to live. I don't pay for my town becoming richer, but I get it anyway.

[DuncanK]

Originally posted by Imran Siddiqui

What the hell are you talking about? What benefits do you recieve if I drive to the beach?

I used to live in a town that was by the beach. You will drive to the beach and spend your money, giving money to the local economy making my town a better place to live. I don't pay for my town becoming richer, but I get it anyway.

I'm going to spend all of my income whether I drive to the beach or not