What is a Bottleneck? In a business system or operations chain, things can only go as fast as the slowest piece. A bottleneck in a system is a part that is slowing down everything else. If the bottleneck is strengthened … Continue reading
Daniel Dollinger
Definition A barrier to entry as the name indicates is whatever factors that are in place that prevent some companies from entering an industry. The most common barrier to entry is cost. As mentioned in an earlier post, a company … Continue reading
The market was slightly down this month and somewhat up for the quarter. Nothing exciting either way. My wife suggested that I discuss social security. I then realized that I have ignored this topic in my newsletters. I answer a … Continue reading
Statement: Increased competition brings down consumer costs The statement is not necessarily true. What is true is that competition between suppliers will always apply downward pressure on consumer cost. In complete isolation, the statement is completely correct. However, in real life … Continue reading
Introduction Economically, a minimum wage is simply a price floor. The minimum wage employees are the suppliers of labor (they are selling their time) and the companies are the demanders of labor (they are buying that time). So we can … Continue reading
I would just like to remind everyone to immediately bring in their tax documents (w2s, interest income, etc.) to their CPA or accountant so they can get their tax return filed. If you fail to file a tax return, you … Continue reading
In Short Economics is the study of how people make decisions when in a state of scarcity. It is people choosing one option for another and the allocation of scarce resources. What is Scarcity? In life, people cannot get everything … Continue reading
What is the Forced Rider Problem? A forced rider is when someone is forced to pay for a good/service that they do not benefit from. The forced rider problem is that the good/service is thus overprovided. Assuming that other people don’t … Continue reading
What is the Free Rider Problem? A free rider is when someone enjoys the benefit of a good/service that they didn’t pay for. The free rider problem is that the good/service is thus underprovided. For if there is no penalty … Continue reading
Definition Moral hazard is when the risk/cost of an action is borne by someone other than the person doing the action. If a person receives all the benefit and none of the cost, they will engage in excessive risky behavior … Continue reading