151

When I spend $1.00 at a local store, some of that money goes as salary to a local person, and some as taxes (property, income, sales etc) to my local government. When I buy the same item for 10% less online, as little as none of the 90 cents goes to those things. (There may be sales tax collected for my country or province/state.) For some people, the total ...


94

There are several reasons, but in my view they all basically boil down to this: the "purpose" of each buyer is not, as you say, "to maximize savings". Rather, each person's goal is to have a good life. When viewed narrowly, buying from large stores offers the best savings on the individual purchase; however, when viewed more broadly, the lower price may ...


53

One explanation is that movie patrons are considering their total willingness to pay for the movie experience so that if the ticket price plus the market price of popcorn is less than their willingness to pay (WTP), the theater has an opportunity to extract more consumer surplus by charging higher than market prices for the popcorn (that is, price ...


45

A great deal of analysis on this question relies on misunderstandings of the market or noticing trends that happened at the same time but were not caused by each other. Without knowing your view, I'll just give the basic idea. The amount of active management is self-correcting. The reason people have moved out of actively managed funds is that the funds ...


31

Currencies are indeed "actually" traded basically on what is called the "Interbank Market" Here's a quick read on that: https://en.wikipedia.org/wiki/Foreign_exchange_market Let us compare and contrast! Stocks (like AAPL) are (as a rule) traded on the two or three huge "stock exchanges" such as "Nasdaq", which everyone has heard of. Commodities like gold ...


26

What this means is this: The authors of the website claim they have calculated the cost that it will take to "fully fund the Medicare, Medicare Prescription Drug Program, Social Security, Military and civil servant pensions." They claim that the government will have to spend $114T to do the things it is currently promising to do, and it hasn't set aside the ...


24

One aspect of a buyer's concern is knowing what they are buying. Eggs are a pain point for me. I can afford a premium egg price to satiate my morality. I don't like the idea of chickens in battery cages; I don't want to eat eggs from chickens in battery cages. I don't want to eat eggs from chickens in "furnished/enhanced housing" (large battery cages). I ...


23

does it mean uncontrolled severe deflation/inflation is more likely to occur compared to "normal" currencies such as USD, EUR etc? Look at the chart referenced in the link in your question. It took approximately 50 years for annual production of gold to double from 500 tons to 1000 tons. It took approximately 40 years for annual production to double ...


17

Not much at all, especially an introductory level Microeconomics class. There are a few reasons for this: Finance and investing is not actually economics. Some of economics surrounds investing, but economics as a field is much wider than that. The class will likely cover the concepts behind how you theoretically make economic decisions, and not why putting ...


17

To add to Jason's answer; a further mechanism is that of monopoly rents which you mention in your question. Movie theatres are often in shopping complexes (which themselves may offer a particular cinema exclusivity), or physically remote from each other, making price comparison more difficult. Different companies may not offer the same movies (similar to ...


17

Uber, FB and Airbnb are facilitators, since they, well, facilitate connections between the consumer and the provider. Alibaba and Amazon are in that role, too.


16

The short answer is that banking is complicated, but the bank really doesn't need your money because it can get it from the Fed almost free, it can only use 90% of the money you give the bank, it can only make money on that 90% from very low-risk and thus low-return investments, and as it has to show a profit to its shareholders it will take whatever cut it ...


15

As one can see here, the world population is growing. Assuming worldwide demand for gold is a function of population, the question you have to ask is whether gold mining outpaces population growth. Just eyeballing it, I'd say they're about even although annual production is far noisier. Keep in mind that gold extraction is not an easy process though. At the ...


14

They borrowed it from the people, and typically to finance wars and military spending. For example, Wikipedia suggests that the Bank of England "was set up to supply money to the King. £1.2m was raised in 12 days; half of this was used to rebuild the Navy." It's a game that everyone has to play once started; if Napoleon buys an army on credit, you'll have to ...


13

Would you mind adding where that additional value comes from, if not from the losses of other investors? You asked this in a comment, but it seems to be the key to the confusion. Corporations generate money (profits, paid as dividends) from sales. Sales trade products for money. The creation of the product creates value. A car is worth more than ...


12

Mining/discovery of gold can be inflationary -- the Spanish looting of Central America for a few hundred years or the gold rush in the 19th century US are examples of that phenomenon. The difference between printing currency and mining is that you have to ability to print money on demand, while mining is limited to whatever is available to extract at a ...


12

I listened to about 15 minutes of the video, but then I read your other link, which gives a much better summary. This guy is an idiot. Just consider this statement: "If everyone was taxed at 100%, it wouldn't be enough to balance the federal budget." This is true to some extent. It wouldn't be enough to balance the federal budget in one year. Experts ...


12

Weddings are a lot more work for service professionals than other events. The drive to get everything right for a once-in-a-lifetime-event takes means more meetings and pressure. For example, a florist describes the difference between a corporate event and a wedding in a Huff Post article. A corporate event usually involves a couple phone calls and maybe ...


12

Here's a very simple way to determine the exchange rate between dollars and euros, assuming you have a few dollars: Go from place to place and ask them how many euros they'll give you for your dollars. Accept the best offer you get. Go from place to place and ask people how many dollars they'll give you for your euros. Accept the best offer you get. If you ...


11

If we postulate that there is at least some element of truth to the phrase 'A leopard does not change his spots' and then consider this tidbit He conveniently forgets to mention his 1.5 million dollar fraud fine from the SEC over investment “advice” he sold through a news letter. The SEC claimed and the judge agreed that the report was “replete with ...


11

No. An exchange rate tells you the exchange rate, that's all. Changes in exchange rates are a little more interesting because they suggest economic changes (or anticipation of such), but since the exchange rate is the composite of many economic forces, determining what changes may be in action from an exchange rate change is not really possible.


11

There is no general theory to support the notion that larger companies will be more profitable than smaller companies. Economies of scale are not always positive, one can have diseconomies of scale too. It is more common to talk about an optimal firm size, even going back to Stigler's (1958) "The Economies of Scale." Intuitively, if economies of scale ...


11

The psychology around money is the subject of a lifetime of study. Your observations are not uncommon. The market daily fluctuation is out of our control. Hopefully, by the time the 1% volatility impacts you by say $1,000, you'll have grown accustomed to it, so when the 1% is then $10,000, you won't lose sleep. The difference between the $1000 up/down and ...


11

I am from Australia, so my answer is based on my experience over here, however it should be similar for the USA. Generally, what determines both the price of houses/apartments and the rents for them is supply and demand. When there is high demand and low supply prices (or rents) generally go up. When there is low demand and high supply prices (or rents) ...


11

The argument you are making here is similar to the problem I have with the stronger forms of the efficient market hypothesis. That is if the market already has incorporated all of the information about the correct prices, then there's no reason to question any prices and then the prices never change. However, the mechanism through which the market ...


11

No one applies the factors to calculate an exchange rate (for freely floating currencies) — it’s not calculated at all, but determined from what actually happens in the market. People who want to buy currency A with currency B bid on how much of currency B they are prepared to give in order to get currency A. Similarly, people who want to buy currency B with ...


10

By the phrasing of your question it seems that you are under the mistaken impression that countries are borrowing money from other countries, in which case it would make sense to question how everyone can be a borrower with no one on the other side of the equation. The short answer is that the debt is owed mostly to individuals and institutions that buy ...


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