Saturday, February 21, 2009

Economics in Music

Examine this conversation in Barenaked Ladies' "If I had $100000:

Singer 1: If I had a million dollars/We wouldn't have to eat Kraft Dinner
Singer 2: But we would eat Kraft Dinner
Singer 1: Of course we would, we’d just eat more
Singer 2: And buy really expensive ketchups with it
Singer 1:That's right, all the fanciest ketchup.

What type of good do these singers believe Kraft dinner to be (Normal/Inferior)? How do you know? What is Ketchup's relationship to Kraft Dinner? Explain.

Tuesday, February 3, 2009

Get Your Obama Check

That was the title of a banner ad that caught my eye. The link took me to, where Mike Donahue demonstrates the ability to get a $12,000 check from the government. To prove his honesty, he displays pictures of his kids, and openly admits he hates "all those 'get rich quick' schemes you see on TV". He even has a picture of the check to prove it is real. Best of all, he claims that for $1.99 he'll gladly send anyone a kit teaching them the secret of how to get these grants.

The offer seemed too good to be true, so I didn't rush for my wallet, but how sure was I? Well, as a rational agent, I would only participate if

P(grant)*(grant value) > $2.00


P(grant) > ($2/$1200)

Therefore, I was 99.9 percent confident that the grants were not as easy as Donahue claimed.

Compared with the totality of knowledge which is continually utilized in the evolution of a dynamic civilization, the difference between the knowledge that the wisest and that which the most ignorant individual can deliberately employ is comparatively insignificant. ~Fredrich Hayek in The Constitution of Liberty