An English newspaper reports that an opera producer has had to cut back the number of naked male actors from 88 to 25 for fear that, given the size of the stage, some of the naked actors would fall into the orchestra pit. The stage is fixed capital; the marginal product of the 26th naked actor is negative — the production would be severely disrupted if an actor fell off the stage. Since the opera is about the “sex-crazed Duchess of Argyll,” presumably the marginal product of the first actor is positive — given the Duchess’s proclivities, having zero naked actors would make no sense; marginal products decrease but are still positive up through 25, then become negative thereafter. This is, of course, in the short run; perhaps if there were more time to produce the play, the capital stock could be increased — a larger stage could be built — and the marginal product of the 26th actor would be positive. (HT: CB)
Eight years ago I blogged about a trip up to Haleakala National Park in Maui, noticing that at 9:45AM the National Park Service didn’t bother staffing the entry gate, thus not collecting the entry fee. Presumably the variable cost of the staff time wasn’t covered by the few entrants at that early hour.
This week we made the same trip at the same early arrival time — but now the gate was staffed and a Park Service attendant collected entry fees. Read More »
McDonald’s has reintroduced its McRib sandwich. Consisting of meat that at one point belonged to a pig, it is now on yet another farewell tour, its sixth since 2004. (Actually, the first three were called “Farewell Tour,” the last three have been called “Reintroduction.”) The website the Awl.com points out that the reintroductions of this unusual product have all coincided with downturns in the price of pork.
Seems reasonable to me: Mickey D’s assumes there is some best price for the McRib and compares it to the marginal cost, exactly as in our introductory textbooks. When the marginal cost drops sufficiently (and presumably the price of pork is the most variable item in costs), back comes the McRib. (HT to CVB)
Three weeks until classes start, including my 500-student section of micro principles. Unlike in past semesters, I won’t be assigned any smart undergrads to lead review sessions. Budgets are limited, but all other “large” sections–some less than half the size of mine–have undergrad assistants assigned. “Why not?” I ask. I’m told it’s because I do a good job and don’t need the sessions. Read More »
We teach that people make decisions comparing marginal benefit to marginal cost. We labor economists apply this to decisions about work, telling students to compare the return (the wage) to the opportunity cost (the value of non-market time). Read More »
The free newspaper on the London tube has this front-page advertisement: “From 10 a.m. tomorrow, £10 ($15) hotel rooms, on the web site lastminute.com.” For an economist this is a heartwarming advertisement. Clearly these are hotel rooms that would otherwise go unfilled. While $15 is not much, I would imagine that it is a bit […] Read More »
We just returned from four days of hiking in Big Bend National Park, and today we drove 500 miles in Texas along I-10. A number of oil wells were pumping vigorously along the highway. When we took the same road 6 years ago, the wells were there, but they were not pumping. This is no […] Read More »