The world's funniest economics stories

Chapter 10 Milk Coke Economics--An Interesting Economic Phenomenon (3)
Wives and concubines, one plucks out black hair and the other plucks white hair. Their motivation for pulling out their hair is to be with the rich man and look more suitable, but in the end there is a result that they are unwilling to accept. It can be said that no matter it is Wives or concubines, their selfishness directly caused the rich man to be "bald".

As an important concept in economics, market failure refers to the situation that the market itself cannot effectively allocate resources, or some obstacles in the market mechanism cause allocation errors or wasteful use of production factors.Classical economists believe that everyone can achieve the effect of market optimization by starting from self-interested goals.But the facts have proved that if everyone is self-interested and left to their own devices, it will also cause the tragedy of "market failure".

In the fable, the rich man’s own conditions did not meet the needs of his wife and concubines for a “good match”, which is the cause of the “bald” ending, while the behavior of monogamy and one concubine pulling out the hair of the rich man for his own purpose is the cause of the “bald” ending. The immediate cause of baldness.

The market is a good way to allocate resources, and a market economy is more efficient than a planned economy.But the market mechanism is not omnipotent, it cannot effectively regulate all areas of people's economic life, and at this time there will be market failure.

There are many reasons for market failure, which are highlighted in the following aspects:
[1] Unequal distribution of income and wealth.The market mechanism follows the principles of capital and efficiency, making income and wealth more and more concentrated to the rich, while others tend to be poorer, resulting in a further widening of the distribution of income and wealth.

[2] Negative external effects.Negative external effects refer to the damage caused by a subject to other subjects in the process of production and consumption activities.

[3] Formation of market monopoly.Generally speaking, competition is between similar products or substitute products in the same market.But on the one hand, due to the development of the division of labor, the difference between products is constantly widening, the scale of capital and the increase of transaction costs hinder the free transfer of capital and free competition.On the other hand, due to the emergence of market monopoly, the degree of competition has been weakened and the role of competition has declined.

[4] Asymmetric information.Because the information of the participants in economic activities is different, some people can use the information advantage to conduct fraud, which will damage legitimate transactions.When people's fear of fraud seriously affects trading activities, the role of the market will be lost, and the function of the market to allocate resources will also fail.At this time, the market cannot completely solve the problem by itself. In order to ensure the normal operation of the market, the government needs to formulate some regulations to stop and restrain fraudulent behavior.

The destructive effects of market failures are enormous and can even lead to economic crises.For example, the Great Crisis of 1929-1932 was a typical market failure. In 1933, the industrial production of the entire capitalist world fell by 40%, and the industrial output of various countries fell back to the level at the end of the 19th century. The total trade volume of the capitalist world decreased by 2/3, and a total of 29 enterprises in the United States, Germany, France, and the United Kingdom went bankrupt.There are more than 3000 million unemployed workers in the capitalist world, and more than 1700 million unemployed people in the United States.

Due to the existence of market failure, to optimize the allocation of resources, the government must intervene.Government intervention or regulation is needed precisely because markets can fail.The combination of market rules and government regulation can effectively curb the phenomenon of "market failure".

Market economy refers to an economic operation mode that realizes the optimal allocation of resources through market mechanisms.

A planned economy, also known as a command economy, is an economic system in which production, resource allocation, and product consumption are planned in advance.As the name implies, it is to develop the economy in a planned and planned way, thereby avoiding the harm caused by the blindness and uncertainty of the market economy development to the social and economic development, such as redundant construction, vicious competition of enterprises, factory closures, worker unemployment, regional economy, etc. Unbalanced development, social and economic crisis and other problems.

7. Should beauty be taxed? Beauty Economy
According to legend, there was a rich man named Mahami in ancient India who had seven daughters who were all as beautiful as flowers and jade.Mahami was very proud of the beauty of his daughters, so whenever guests came to visit, Mahami would let his daughters show off in front of the guests. This kind of showing off made him feel very happy.

One day, a guest who claimed to be a tailor came to visit unexpectedly.He said to the rich man Mahami: "I heard that your daughters are all peerless, but as a tailor, I think they are not as beautiful as the clothes I make." Hearing this, the rich man couldn't help but gather together. There was a burst of anger.

"We can make a bet that I will make the most beautiful clothes for your daughters, and I hope you can bring them to my store to try them on. If everyone thinks your daughters are beautiful after seeing them, then I am willing to lose I will give you 500 taels of silver." The tailor continued to say to Mahami seriously.

After hearing what the tailor said, Mahami thought: This must be a matter of making money. I have confidence in my daughter, so I agreed with the tailor's opinion.

The next day, Mahami took his daughters to the tailor's shop.The moment the daughters put on the clothes made by the tailor, people who came to see them were shocked by their beauty.Dressed up in beautiful clothes, Mahami's daughter looked extremely glamorous, and then there were clicks of admiration from the surroundings.Some people admired the beauty of the girls, while others admired the tailoring skills. There was a lot of discussion, but when it came to which one was better, everyone agreed that Mahami's daughters were more beautiful.

Mahami was very happy to get people's affirmation and 500 taels of silver.Strangely enough, the tailor who lost his money wasn't lost either.

So, puzzled, Mahami sent someone to secretly observe the situation of the tailor shop, and found that after the bet, the tailor shop was soon full of beautiful women who came here admiringly, and everyone wanted to be a tailor. It makes tailor-made clothes.The clothes sold by the tailor also changed from 1 tael of silver to 3 taels of silver from the day of the bet.

After reading this story, I can't help but marvel at the cleverness of the tailor.Taking advantage of the competitive and vanity of the rich man Mahami, the tailor cleverly borrowed the charm of several girls, while attracting the attention of others, he also launched the brand of clothes he made, increasing the sales revenue... With the help of "fashion Under the impetus of the "beauty effect", tailors quickly entered the fashion market.Tailors have well practiced the "beauty economy" in the economic activities of wealth creation and distribution around the resources of beautiful women.

The beauty economy refers to the economic activities of wealth creation and distribution around beauty resources.Beauty economy is "eyeball economy", because beauty attracts people's attention.

There are many examples of the "beauty effect", and there is a related record in "Historical Records".

The song "Phoenix Seeking the Phoenix" not only makes us feel the beautiful love between Sima Xiangru and Zhuo Wenjun, but also truly feels their true feelings for each other in the life of "poor couple" after running at night.

It is said that after Sima Xiangru and Wenjun eloped to Chengdu overnight, facing a difficult life, the two decided to sell their carriages and horses, and opened a hotel in Linqiong, and Wenjun sold wine on the street.With his beauty, Zhuo Wenjun attracted many people to buy wine, and the life of the two gradually improved due to the prosperity of the wine store business.

Wenjun "selling wine as a loam", this is the "beauty economy" effect that appeared as early as the Western Han Dynasty.Because of her beauty, Zhuo Wenjun sold wine in public, which attracted more people to buy wine, and the living conditions of her and Sima Xiangru were improved.

From the past to the present, Zhuo Wenjun's story makes people quickly think of the popular car models, sales girls, cosmetics spokespersons, fashion shows, underwear shows, and making money by borrowing beautiful women.From this point of view, today's "beauty economy" seems to have become the most fashionable and common business operation.

When more and more front-end recruitments continue to improve the appearance standards of candidates, and the etiquette promotion work gives the green light to beauties, there is no doubt that businesses have regarded the image of beauties with natural beauty as a precious capital. Turning capital into value, the market for the "beauty economy" is still expanding.

The eyeball economy, also known as the attention economy, is an economic activity that relies on attracting public attention to obtain economic benefits.The reason why attention is important is that attention can optimize the allocation of social resources and also enable manufacturers to obtain huge benefits.

8 Women's menstrual period will affect shopping desire--impulsive consumption

Do you like shopping?Do you often go on a shopping spree? At the beginning of 2009, "Southeast Express" once published a news about women's shopping "menstrual period".

Regarding the relationship between women's menstrual cycle and shopping needs, a British psychologist found through research that women are more likely to have shopping impulses in the last 10 days of the menstrual cycle, and the later the menstrual cycle is, the more likely they are to overspend on shopping The bigger it is, the more intemperate and impulsive it is in spending money.

Scientists believe that hormonal changes in a woman's menstrual cycle can trigger negative emotions such as depression, stress and anger.When they feel very stressed or depressed, shopping is one of the effective ways to relieve their emotions.In order to adjust their emotions and make themselves happy, shopping has become an "emotional habit" for many female friends.In this shopping process, perhaps they are not buying products because of their needs, but enjoying the excitement brought by shopping.

At the same time, many women also feel annoyed and regretful about impulse shopping.For example, some people are not used to wearing high heels, but because of a whim, they may buy several high heels at the same time.However, after a while, when the excitement wears off, she will not want to wear these new shoes because they don't fit her own wearing habits.

"I get caught on the urge to buy something, and if I don't buy something, I feel anxious and like I can't breathe. It sounds ridiculous, but it happens every month." Said one woman who participated in the scientific study .

Women should avoid shopping later in the menstrual cycle if they're worried they'll be spending more, scientists say.

The research results of scientists allow female friends to better understand their shopping habits. At the same time, this research result also brings opportunities for many merchants to sell products.

When we go shopping, we always encounter this kind of situation: when we see a small thing, we suddenly feel that we need it very much, so we buy it, but afterwards you feel that this thing is useless to you.This is typical impulsive consumption.

Impulsive consumption refers to the decision to buy goods only based on intuitive feelings and emotions under the domination of a certain eager buying psychology.For impulsive consumers, the emotional factors of personal consumption are beyond the constraints of cognition and volitional factors, and they are easy to accept the influence of the appearance and advertising of commodities [especially fashion commodities].

Some people say that women are the most illogical, so women are the easiest to be seduced, and women are the most profitable.When it comes to shopping, that statement couldn't be more apt.In daily life, if we pay attention a little bit, we can find that women always have various reasons for consumption.They can spend a lot of money to buy expensive clothes that they don’t actually wear a few times; they can buy back many things that they don’t need or use at all, but talk about it in the process; they can, on a whim, Empty your pockets, and later find all kinds of excuses for yourself in regret, and comfort yourself...

In fact, impulsive consumption is a kind of perceptual consumption.No matter how rational people are, they also have an emotional side. Therefore, in the process of consumption, each of us has a tendency to consume impulsively.A statistic shows that after entering the consumer market, people without consumption plans are more likely to make impulse purchases than those with certain consumption plans.In terms of impulse shopping, men prefer high-tech and newly invented products, while women prefer clothing, shoes and hats.

In life, each of us plays the role of economic man every day. Therefore, it is very important for us to develop good shopping habits, properly control our spontaneous shopping impulse, and minimize our annoyance after shopping.

Impulse buying [unplanned buying] refers to the goods that customers buy in the supermarket that they have not ordered or realized before coming to the supermarket.The impulse buying decision of the customer is formed after entering the shopping place.

Types of Impulse Spending
[1] Pure impulsive type.The customer has no desire to purchase in advance, and has not gone through the normal consumption decision-making process, and decides to purchase temporarily.Completely deviate from the normal selection of goods and trademarks when purchasing, it is a sudden behavior, it is a whim or a whim out of psychological reaction or emotional impulse, or it is novelty or change.

[2] Stimulus impulsive type.When customers see a certain product or certain advertisements and business promotions at the shopping site, it prompts or arouses the unsatisfied consumption needs of customers, thereby causing consumption desires and deciding to purchase, which is the result of stimulation at the shopping site.

[3] Planning impulsive type.Customers have certain purchase needs, but have not determined where and when to buy.For example, if you know that a certain supermarket is going to sell at a profit, you will go shopping in that supermarket, but you don’t have a specific shopping list, so you have a plan to buy “cheap goods”, but you are impulsive to buy what kind of “cheap goods”.

(End of this chapter)