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1966 – Botany 500 Tailored Men’s Fashion Suits (Playboy Magazine – page 86) … FSU News – Why market price is important – scarce resources still need to be allocated in a rational manor (Apr. 4, 2012) …


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The price of a good reflects so much more information than we tend to give it credit.

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…..item 1)… FSU … FSU News … www.fsunews.com … Why market price is important

5:16 PM, Apr. 4, 2012 |

Written by
Chad Squitieri
Senior Staff Writer

FILED UNDER
FSU News
FSU News Views

www.fsunews.com/article/20120405/FSVIEW03/120404028/Why-m…

When resources are scarce they need to be allocated in a rational manor. This is a basic concept of economics that many students encounter on a day to day basis whether it is consciously realized or not.

Take for example, what you plan on having for lunch today. Chances are unless you grow your own farm in your apartment—that mold that has accumulated since the last time you cleaned does not count—then you have to purchase your lunch from somewhere. Whether it be from the grocery store or a fast food restaurant, in order to eat you exchange some cash in return for food. This is a task that we all complete with little thought, however, a closer look at such a simple transaction reveals that there is much more going on than just a growling stomach and swipe of a debit card.

Think of all of the assumptions you make when you decide to head to the grocery store to grab lunch. You assume that the store will accept your payment in cash and not something else such as bushels of bananas; you assume that the store which has hundreds of thousands of different products will have the specific product you want, and perhaps most importantly you assume that the product you would like to buy will be sold at a price you deem reasonable in regards to how much that product is worth to you. The lists of assumptions go on and on and all take place in just that one simple transaction to buy lunch.

But how does the store know all of that information? How does the store know how much of each of the thousands of products sold to keep on stock and at what price to sell them? The answer deals with the market and is a topic that has been examined and discussed in great detail.

The theory, for which I take no credit but will unavoidably butcher in an attempt to explain, deals with the fact that different factors affect the market all the time. Taking the lunch example further, let us say you would like some sushi. The price of the sushi is going to depend on multiple things ranging from how much it costs the grocery store to pay the sushi makers to prepare the sushi, all the way down to how much fishing nets cost in order to catch the fish on the other side of the world.

Imagine if the grocery store owner had to collect all of the information attributed to the fish, rice and vegetables that go into making sushi every day and then do the same for every product in the store.

Luckily for the store owner, all of that information is distributed through the market in the form of price. In other words, the grocery store owner does not care, or even have to know what the cost of fish nets are a world away in order to know what price to sell sushi at. All the owner needs to concentrate on are the marginal costs incurred by the store. Even if the store owner wanted to know all of the information in regards to sushi, it would be impossible to acquire and to continue to acquire each and every change in a number of factors that affect sushi.

Now, in the absence of price, scarce resources still need to be allocated in a rational manor, and in many circumstances dealing with goods without a traditional price, the pricing system tends to be the fallback.

One way to assign value to a good is to arbitrarily place a value on it. This was a method used in Soviet Russia which led to many abnormalities such as the price of a loaf of bread costing less than the price of the wheat used to make it. Arbitrarily placing a value on a good tends to led to surpluses or shortages of the good which often leads to a market being created in order to find the market price of the good. There were many cases of this in Soviet Russia but for an example a little closer to home let us look at football tickets for home games in Tallahassee.

Being that tickets are “free,” a big game tends to create large demand for tickets. When there are more students wanting to attend the game than there are seats in the stadium, the tickets must be limited to a certain number which leads to excess demand. This creates a situation where there are often some students with a ticket who do not necessarily want it, and other students who really want a ticket but were not lucky enough to receive one. This type of situation tends to fall back on prices.

Think about what tends to happen when a big game is scheduled and tickets are sold out. Students often sell their tickets to other students who want them more and are willing to pay for them. The price of these tickets is not determined by the ticket seller individually going around to each student and asking how much they value the ticket, or by arbitrarily assigning a dollar value to the ticket, the price is set by ticket buyers and ticket sellers coming together and creating a transaction both agree on.

The price of a good reflects so much more information than we tend to give it credit.
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Phoenix, AZ (PRWEB) May 07, 2012

To keep up with consumer demand in the Phoenix Metropolitan residential real estate investment space, Investment Property Experts (IPX) announces the expansion of its professional resource network, new business segments and new office location.

Investment Property Experts has relocated to a prime Central Phoenix address at 2048 N. 44th Street, Suite 100 to allow for more operational space of its business entities: mortgage company, real estate brokerage, renovation company, credit/debt repair, marketing and technology center and property management company.

To add to their company offerings, IPX announces three new business segments:

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