Friday, July 21, 2006

All kinds of costs

As an international graduate student living on a shoestring budget and with little opportunities to borrow the most valued products will be consumed, for example housing close to school, or atleast on the bus route. However, accommodation near school will have high demand and that will drive rental prices up. Therefore, only those who have the means to pay the rent will live close to school, and the international graduate student is most likely not one of them. People who do not understand basic economics will now say that there is discrimination against international graduate students by the home owners near school. We can replace international graduate student with any number of other groups and see how rent control, zoning laws and other such policies affect the basic workings of the market.
On a similar note. You will hear parents say things like, OOh!! We sacrificed so much so that you could get a good education and all the comforts of life. Sacrifice considered a virtue. No offence meant to their noble intentions, they just did not want the other things as much as they wanted a good education and comforts for you. On the margin the costs of the sacrificed were higher than the benefits from doing so. Point of the day!! Even people who do not have a graduate economics degree think marginally and act according to basic economic principles although they give it other names.

No comments: