Wednesday, August 13, 2008

How Basic Economics Kept My Rent Stable, Today

This morning I blasted my computer speakers in order to hear my iTunes in the shower. Less than 2 minutes later, I thought about the noise [a negative externality] that my landlord and his customers are experiencing downstairs. Next, I thought about a possible threat of a rent increase [a tax] next year to limit this noise pollution. For me, the thought of this threat, alone, served as a correction of this external cost [leftward supply shift].

1 comment:

Mike Fladlien said...

I like to sing in the shower too and that's a negative externality that should be heavily taxed...congrats on a fantastic finish at the fed challenge...