Sunday, February 04, 2007

News Articles that use Economics

The WSJ has two good articles that employ the principles of Economics this weekend.

First is an article on the economics of modelling, where they describe plummeting wages for models due to a sharp increase in supply (this is something we can model using the supply and demand graph.)

Second is an article on the rising prices of parking meters, which are being used to provide an incentive for less parking around peak parking spots as well as greater churn. This dovetails nicely with incentives and quantity demanded. Remember: The higher the price the less quantity demanded there will be. They also work in the concept of elasticity when they say that the quantity demanded is still very strong despite the increase in prices, suggesting that demand is inelastic.