by Alex Tabarrok
on December 8, 2010 at 11:25 am
in Current Affairs, Economics, Education |
From Seth Gitter at the Blog of Diminishing Returns.
I may be missing something, I am a physician and not an economist, but the PPF with the miracle should be convex, with an infinite number of Latkes at an infinite number of Days of Light. The opportunity cost is negative, because the more miraculous the miracle, the more producers of latkes are willing to produce latkes.
Alex, thanks for linking my PPF and Happy Hannukah to all! For Adam I didn't draw the second PPF, since we only observe that the oil lasted for eight days, enough time to make a new batch of the special eternal light (at least that is what I learned in Hebrew school), we don't know if 8 latkes could also be made or only 1.
Also please click through to my blog for more Jewish Econ humor!
Why is the miracle associated with a corner solution? Presumably, a tradeoff between latkes and light occurs because oil is an input to both (though latkes were invented after Hannukah). Presumably without the miracle, there is enough oil only for a few latkes and one day of light. Why does the miracle result in no latkes? The miracle consumption optimum should be in the interior, not a corner.
If you liked this, you might like to know that I took the liberty of putting some music to Seth's Hanukkah song:
As an up-and-coming economics student, I have to question this graph. As in any ppf, no point outside the curve can be reached. I was never informed that "miracle" was a technological or sociophysical event that could cause any sort of supply shock. Even if this economy maxed out production of its days of light, it could not peak above 1. I would suggest this chartmaker retake economics 101 and secure basic knowledge before making extraordinary claims.
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