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DIAMOND-WATER PARADOX: The perplexing observation that water, which is more useful than diamonds, has a lower price. If price is related to utility, how can this occur? This paradox was first proposed by classical economists in the 19th century and was subsequently used as a stepping stone for developing the notion of marginal utility and the role it plays in the demand price of a good. The paradox is magically cleared up with an understanding of marginal utility and total utility. People are willing to pay a higher price for goods with greater marginal utility. As such, water which is plentiful has enormous total utility, but a low price because of a low marginal utility. Diamonds, however, have less total utility because they are less plentiful, but a high price because of a high marginal utility.
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AUTOMATIC STABILIZERS Taxes and transfer payments that depend on the level of aggregate production and income such that they automatically dampen business-cycle instability without the need for discretionary policy action. Automatic stabilizers are a form of nondiscretionary fiscal policy that do not require explicit action by the government sector to address the ups and downs of the business cycle and the problems of unemployment and inflation.
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BEIGE MUNDORTLE
[What's This?]
Today, you are likely to spend a great deal of time going from convenience store to convenience store seeking to buy either one of those memory foam pillows or a remote controlled train set. Be on the lookout for pencil sharpeners with an attitude.
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This isn't me! What am I?
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In the early 1900s around 300 automobile companies operated in the United States.
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"I can feel guilty about the past, apprehensive about the future, but only in the present can I act." -- Abraham Maslow, Psychologist
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SEHK
Stock Exchange of Hong Kong
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