A simple economics question: - Page 2

vulturesrow · #11 09-13-2005, 01:43 AM

Right. So the answer to the OP:

[ QUOTE ]
Person A has a monthly disposable income of $1 million.
Person B has a monthly disposable income of $100.

Does a goods-and-services market weight their wants and needs equa

[/ QUOTE ]

is absolutely not. The market doesnt weigh needs. It weighs wants in the form of demand.

FishHooks · #12 09-13-2005, 01:44 AM

How is market demand more influenced by rich people? I dont get it, unless your going for the extreme example of things like yachts, limo's and thinks like that. The market is extremely efficient. Its so hard to comment on this thread because its soo broad and not really suited for true economic discussion, its more theory.

FishHooks · #13 09-13-2005, 01:46 AM

Again too broad of an issue to make a statement like that. In simple terms thats correct. However yachts aren't in huge demand compared to other products yet many companies make them and the market is perfectly competitive. It's a combination of things and is why economic is complex.

QuadsOverQuads · #14 09-13-2005, 01:50 AM

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The market responds to what is most in demand, not what brings the most benefit.

[/ QUOTE ]

But this goes back to the original question: is the market price truly a measure of what is 'most in demand'?

q/q

vulturesrow · #15 09-13-2005, 01:50 AM

[ QUOTE ]
Again too broad of an issue to make a statement like that. In simple terms thats correct. However yachts aren't in huge demand compared to other products yet many companies make them and the market is perfectly competitive. It's a combination of things and is why economic is complex.

[/ QUOTE ]

What are you talking about? Its no big news that the free market doesnt always produce the most optimum social goods. Im as "yay capitalism" as anyone but its silly not to acknowledge the weaknesses.

vulturesrow · #16 09-13-2005, 01:51 AM

[ QUOTE ]

[ QUOTE ]
The market responds to what is most in demand, not what brings the most benefit.

[/ QUOTE ]

But this goes back to the original question: is the market price truly a measure of what is 'most in demand'?

q/q

[/ QUOTE ]

Yes.

FishHooks · #17 09-13-2005, 01:55 AM

Provide me evidence of this weakness.

SheetWise · #18 09-13-2005, 01:57 AM

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As to your previous post, the guy making tennis courts would instead be put to work producing food or some other more important good if the free market did not ineficiently direct his resources.

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Why is it ineficient? Different people have different talents. The rich may hire artists, musicians, and gardners as well as tennis court builders. Should they all be producing food or "some more important good"? The fact that they all have money to buy food will take care of that issue.

FishHooks · #19 09-13-2005, 01:58 AM

I dont think so, again the market is too complex just to go by demand, allthough it would be foolish to say it's not one of the biggest factors.

You can have two products with the same demand, but variance in other variables and the market will react totally different to each one. Even saying supply and demand would be more accurate, but even then there are many more varriables.

FishHooks · #20 09-13-2005, 01:59 AM

Finally a post I agree with in this thread.