The first point of discussion will be supply and demand. Professor Hampton said that there will no longer be any points given for posts referring to opportunity cost because too many have already been written (I would place a direct quote here, but I already deleted the message because the opportunity cost of keeping it in my overflowing OSU email account was obviously too high...but enough wasting time with things that won't get me points...and no, I'm not bitter because I had an awesome opportunity cost post lined up about my favorite Golden Girls episode). This depreciation of opportunity-cost-centered post value shows a direct correlation to the economic principle that, as supply rises, quantity demanded decreases. This decrease in quantity demanded is directly related to a decrease in cost of the good in question, opportunity cost posts, as related by the demand curve.
This leads directly into a discussion of price-elasticity of demand. The only type of post named by Professor Hampton as one that would not receive points is an opportunity cost post. Though we lack the evidence to presume that opportunity cost posts are more elastic than other types (it may just be that the high supply has been the sole cause of the decrease in value), we can certainly make the claim that such post have an elastic demand curve. This is a reasonable assumption because a reasonably large change in demand was witnessed as a result of a change in supply.
Thus the principles of microeconomics are at work in the most unlikely of places: economics class. Er...well, maybe it is the most likely of places. Anyway, they are certainly visible in the exchange of goods taking place on the Econ 200 blog.
Now, it's time for me to find out what Dorothy, Blanche, and Rose are going to do about that Latin boxer that Sophia bought with their money....
This is so intuitive, I love it; how interesting to write about economics at work in economics class.
ReplyDeleteConsidering how this market is working currently (regardless of now off-limit subjects), I would have to say that there is a perfectly inelastic demand; Kyle, the consumer, wants a certain quantity of blogs written so he can reward points. It doesn't matter how many points he gives out (price), he still wants all of us to write a blog and get the full 15 points.
The supply curve is, unfortunately, nearly perfectly inelastic as well. The increase in points provided seems to not really affect how many people want to supply posts.
If these two curves were to be plotted, we'd see a right triangle, with the hypotenuse starting at the origin and ending at 15n, or 15 points times the number or students, which equals the technical equilibrium price.
This market is apparently not at the equilibrium point, and no one is monopolizing it, no tariffs employed, no "point floors"...there's no reason for there to be this shortage, more producers should be entering the market. Maybe the costs of production (or rather, costs of blogging) are too high for some people.