11 Superior and Inferior Goods It is important that we understand such things as

Question

11 Superior and Inferior Goods
It is important that we understand such things as superior and inferior goods, determinants of supply and demand, the function of price on the market, the CPI, among other things. Before we begin, what is happening in Europe is a classic example of The Law of Unintended Consequences.
Germany, for all the right humanitarian reasons, decided to allow 500,000 refuges, from the fighting in the middle east, to enter Germany over the next 10 years. Once announced the flood gates were opened! Hungary tried to prevent the refugees from transiting their country and entering Austria on their way to Germany. The borders were over-whelmed. Hundreds of thousands swarmed through Austria on their way to Germany. Germany's social services are being over-whelmed! The expenses of dealing with these refugees is turning out to be staggering! The Germans are now closing their borders and are going to start asking for passports from all who enter their country. This is a violation of EU laws. The borders are supposed to be passport free. Italy, Austria and Greece have followed suit but it is all too little and too late. They are being over-whelmed. The United Kingdom has voted to leave the EU (European Union) By March 2019. No one anticipated this flood of refugees except Austrian economists and other people of thought. How many are fleeing oppression and how many are looking for a way to disrupt life in Europe, no one knows.
With open boarders, quite a few people will flee to that country seeking a better life and a better future. This can and does swamp social services and increases both risks and costs tremendously. Which Europe has finally realized. It is fine to be compassionate but at what cost? If a country offers open borders, with all the "free" social services, you might well expect a flood of people wanting to take advantage of the situation. This is also the Free Rider Problem (Problem of the Commons) in action as well. If something is viewed as under-valued or free people will flock to get it whether they need it or not. We are seeing that ourselves on our southern boarder.
When Bill Clinton was governor of Arkansas he wanted to raise money for road work on the State Highway 60 through the Ozarks from Jonesboro to Tulsa, Oklahoma. He doubled the licensing fees on pickup trucks and also doubled the fees on hunting and fishing licenses. The mountain folk took great offense to this. The pickup truck is the Ozark Cadillac and every one seems to be a fisherman and/or a hunter. They were arranging groups to march on Little Rock with tar and feathers in hand! The governor hastily called the legislature back into session and they repealed the law. He instead asked for a temporary increase in the state gasoline tax. The tax was increased by 5 cents a gallon for a period of 5 years. it would then sunset out. There was however a clause in the act that allowed the legislature to renew the tax if the revenues were needed for other state projects. Do you think these taxes have ever gone away?
Why do taxes, once enacted never seem to go away?
While I was Dean of Extension Programs at Arkansas State University, one of my students told me that there are four things in the mountains that you do not mess with. As he put it; they are my pick up truck, my gun, my hunting dog and my wife, in that order. I asked why is your wife last? He replied, I can always find a wife but a good hunting dog is hard to find! Is this mountain subjective valuation?
Everything we do is subjective and has an opportunity cost attached. Harry Browne's book "How I found Freedom in an Unfree World" states this very clearly. Harry, whom I had the honor of knowing, was a very intelligent and kind person but even he said there is a limit to charity. At some point people must learn that changing is something that they are solely responsible for. As he put it: There is only one person who can change your current condition and you stare at him or her every morning in the mirror. We are living in times that remind me of Rome in the third century under Diocletian. Rome was being inundated with immigrants from all the areas of Europe because they were the richest country. They also had a policy of free bread and circuses. Today we have welfare and football. What's the difference? Rome could not long support this vast army of immigrants. It ran out of the richest 1% to tax. To support a massive infrastructure program (sound familiar?) designed to put people back to work. All this was very costly so Dioclectian was forced to raise taxes on everyone. There was massive civil unrest. So a new tax was added to the wealthy. In response the rich moved out. There were insufficient funds to support the welfare programs so Rome entered into a slow decline and ultimately collapsed. By the middle of the fourth century Europe entered the dark ages where they stayed for a thousand years. The renaissance finally started the long climb from darkness into light. Will it happen again? Who knows? History does not repeat perfectly but it does repeat itself. As George Santyana said: "Those who will not remember history are condemned to repeat it." Was he right? I am also reminded of Cato the Younger, in the last days of the Empire, who said; "I look around me and all I see is chaos and disorder. I fear I am the last sane voice in an otherwise insane world." There are times I feel exactly like that! What's going to happen to the chickens when the fox is judge!
Is there an historical lesson here from which we can all learn?
There are 5 embedded questions.
The one thing we learn from history is that we don't learn from history, William Graham Sumner 11 Superior and Inferior Goods
It is important that we understand such things as superior and inferior goods, determinants of supply and demand, the function of price on the market, the CPI, among other things. Before we begin, what is happening in Europe is a classic example of The Law of Unintended Consequences.
Germany, for all the right humanitarian reasons, decided to allow 500,000 refuges, from the fighting in the middle east, to enter Germany over the next 10 years. Once announced the flood gates were opened! Hungary tried to prevent the refugees from transiting their country and entering Austria on their way to Germany. The borders were over-whelmed. Hundreds of thousands swarmed through Austria on their way to Germany. Germany's social services are being over-whelmed! The expenses of dealing with these refugees is turning out to be staggering! The Germans are now closing their borders and are going to start asking for passports from all who enter their country. This is a violation of EU laws. The borders are supposed to be passport free. Italy, Austria and Greece have followed suit but it is all too little and too late. They are being over-whelmed. The United Kingdom has voted to leave the EU (European Union) By March 2019. No one anticipated this flood of refugees except Austrian economists and other people of thought. How many are fleeing oppression and how many are looking for a way to disrupt life in Europe, no one knows.
With open boarders, quite a few people will flee to that country seeking a better life and a better future. This can and does swamp social services and increases both risks and costs tremendously. Which Europe has finally realized. It is fine to be compassionate but at what cost? If a country offers open borders, with all the "free" social services, you might well expect a flood of people wanting to take advantage of the situation. This is also the Free Rider Problem (Problem of the Commons) in action as well. If something is viewed as under-valued or free people will flock to get it whether they need it or not. We are seeing that ourselves on our southern boarder.
When Bill Clinton was governor of Arkansas he wanted to raise money for road work on the State Highway 60 through the Ozarks from Jonesboro to Tulsa, Oklahoma. He doubled the licensing fees on pickup trucks and also doubled the fees on hunting and fishing licenses. The mountain folk took great offense to this. The pickup truck is the Ozark Cadillac and every one seems to be a fisherman and/or a hunter. They were arranging groups to march on Little Rock with tar and feathers in hand! The governor hastily called the legislature back into session and they repealed the law. He instead asked for a temporary increase in the state gasoline tax. The tax was increased by 5 cents a gallon for a period of 5 years. it would then sunset out. There was however a clause in the act that allowed the legislature to renew the tax if the revenues were needed for other state projects. Do you think these taxes have ever gone away?
Why do taxes, once enacted never seem to go away?
While I was Dean of Extension Programs at Arkansas State University, one of my students told me that there are four things in the mountains that you do not mess with. As he put it; they are my pick up truck, my gun, my hunting dog and my wife, in that order. I asked why is your wife last? He replied, I can always find a wife but a good hunting dog is hard to find! Is this mountain subjective valuation?
Everything we do is subjective and has an opportunity cost attached. Harry Browne's book "How I found Freedom in an Unfree World" states this very clearly. Harry, whom I had the honor of knowing, was a very intelligent and kind person but even he said there is a limit to charity. At some point people must learn that changing is something that they are solely responsible for. As he put it: There is only one person who can change your current condition and you stare at him or her every morning in the mirror. We are living in times that remind me of Rome in the third century under Diocletian. Rome was being inundated with immigrants from all the areas of Europe because they were the richest country. They also had a policy of free bread and circuses. Today we have welfare and football. What's the difference? Rome could not long support this vast army of immigrants. It ran out of the richest 1% to tax. To support a massive infrastructure program (sound familiar?) designed to put people back to work. All this was very costly so Dioclectian was forced to raise taxes on everyone. There was massive civil unrest. So a new tax was added to the wealthy. In response the rich moved out. There were insufficient funds to support the welfare programs so Rome entered into a slow decline and ultimately collapsed. By the middle of the fourth century Europe entered the dark ages where they stayed for a thousand years. The renaissance finally started the long climb from darkness into light. Will it happen again? Who knows? History does not repeat perfectly but it does repeat itself. As George Santyana said: "Those who will not remember history are condemned to repeat it." Was he right? I am also reminded of Cato the Younger, in the last days of the Empire, who said; "I look around me and all I see is chaos and disorder. I fear I am the last sane voice in an otherwise insane world." There are times I feel exactly like that! What's going to happen to the chickens when the fox is judge!
Is there an historical lesson here from which we can all learn?
There are 5 embedded questions.
The one thing we learn from history is that we don't learn from history, William Graham Sumner 11 Superior and Inferior Goods
It is important that we understand such things as superior and inferior goods, determinants of supply and demand, the function of price on the market, the CPI, among other things. Before we begin, what is happening in Europe is a classic example of The Law of Unintended Consequences.
Germany, for all the right humanitarian reasons, decided to allow 500,000 refuges, from the fighting in the middle east, to enter Germany over the next 10 years. Once announced the flood gates were opened! Hungary tried to prevent the refugees from transiting their country and entering Austria on their way to Germany. The borders were over-whelmed. Hundreds of thousands swarmed through Austria on their way to Germany. Germany's social services are being over-whelmed! The expenses of dealing with these refugees is turning out to be staggering! The Germans are now closing their borders and are going to start asking for passports from all who enter their country. This is a violation of EU laws. The borders are supposed to be passport free. Italy, Austria and Greece have followed suit but it is all too little and too late. They are being over-whelmed. The United Kingdom has voted to leave the EU (European Union) By March 2019. No one anticipated this flood of refugees except Austrian economists and other people of thought. How many are fleeing oppression and how many are looking for a way to disrupt life in Europe, no one knows.
With open boarders, quite a few people will flee to that country seeking a better life and a better future. This can and does swamp social services and increases both risks and costs tremendously. Which Europe has finally realized. It is fine to be compassionate but at what cost? If a country offers open borders, with all the "free" social services, you might well expect a flood of people wanting to take advantage of the situation. This is also the Free Rider Problem (Problem of the Commons) in action as well. If something is viewed as under-valued or free people will flock to get it whether they need it or not. We are seeing that ourselves on our southern boarder.
When Bill Clinton was governor of Arkansas he wanted to raise money for road work on the State Highway 60 through the Ozarks from Jonesboro to Tulsa, Oklahoma. He doubled the licensing fees on pickup trucks and also doubled the fees on hunting and fishing licenses. The mountain folk took great offense to this. The pickup truck is the Ozark Cadillac and every one seems to be a fisherman and/or a hunter. They were arranging groups to march on Little Rock with tar and feathers in hand! The governor hastily called the legislature back into session and they repealed the law. He instead asked for a temporary increase in the state gasoline tax. The tax was increased by 5 cents a gallon for a period of 5 years. it would then sunset out. There was however a clause in the act that allowed the legislature to renew the tax if the revenues were needed for other state projects. Do you think these taxes have ever gone away?
Why do taxes, once enacted never seem to go away?
While I was Dean of Extension Programs at Arkansas State University, one of my students told me that there are four things in the mountains that you do not mess with. As he put it; they are my pick up truck, my gun, my hunting dog and my wife, in that order. I asked why is your wife last? He replied, I can always find a wife but a good hunting dog is hard to find! Is this mountain subjective valuation?
Everything we do is subjective and has an opportunity cost attached. Harry Browne's book "How I found Freedom in an Unfree World" states this very clearly. Harry, whom I had the honor of knowing, was a very intelligent and kind person but even he said there is a limit to charity. At some point people must learn that changing is something that they are solely responsible for. As he put it: There is only one person who can change your current condition and you stare at him or her every morning in the mirror. We are living in times that remind me of Rome in the third century under Diocletian. Rome was being inundated with immigrants from all the areas of Europe because they were the richest country. They also had a policy of free bread and circuses. Today we have welfare and football. What's the difference? Rome could not long support this vast army of immigrants. It ran out of the richest 1% to tax. To support a massive infrastructure program (sound familiar?) designed to put people back to work. All this was very costly so Dioclectian was forced to raise taxes on everyone. There was massive civil unrest. So a new tax was added to the wealthy. In response the rich moved out. There were insufficient funds to support the welfare programs so Rome entered into a slow decline and ultimately collapsed. By the middle of the fourth century Europe entered the dark ages where they stayed for a thousand years. The renaissance finally started the long climb from darkness into light. Will it happen again? Who knows? History does not repeat perfectly but it does repeat itself. As George Santyana said: "Those who will not remember history are condemned to repeat it." Was he right? I am also reminded of Cato the Younger, in the last days of the Empire, who said; "I look around me and all I see is chaos and disorder. I fear I am the last sane voice in an otherwise insane world." There are times I feel exactly like that! What's going to happen to the chickens when the fox is judge!
Is there an historical lesson here from which we can all learn?
There are 5 embedded questions.
The one thing we learn from history is that we don't learn from history, William Graham Sumner

Explanation / Answer

Answer.
The above example relates to improper laws related to entry of refugees which has increased the expenses on germany as it allowed allow 500,000 refuges, from the fighting in the middle east, to enter germany over the next 10 years but the expenses of dealing with these refugees were huge so germans closed their borders and they started asking for passports from all who entered their country.
But withan open boarders only few people can flew to that country seeking a better life and a better future which has swamped social services and increased both risks and costs tremendously and then Europe has finally realized. It is fine to be compassionate ,If a country offers open borders, with all the "free" social services, you might well expect a flood of people wanting to take advantage of the situation. This is also the Free Rider Problem (Problem of the Commons) in action as well. If something is viewed as under-valued or free people will flock to get it whether they need it or not.
From the above example we learn that laws need to followed seriously as they are made according to the situations and circumtances keeping in view the welfare and social well being of the people or considering the problems of commons and if the laws are not made correctly or not followed it might lead to civil unrest and paying tax is the duty of every citizen so there should be fair participation in paying taxes.

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