tag:blogger.com,1999:blog-7169279.post6837633569741299649..comments2023-11-24T03:20:02.361-07:00Comments on Tufte's Economics Classes Blog - A Living Textbook: New vs. UsedDr. Tuftehttp://www.blogger.com/profile/17397586052171706438noreply@blogger.comBlogger10125tag:blogger.com,1999:blog-7169279.post-75217190038924185662011-09-25T21:56:28.121-06:002011-09-25T21:56:28.121-06:00Periods on abbreviations like Dr. are very close t...Periods on abbreviations like Dr. are very close to something I should take points off for Sam. If the English didn't do this, I probably would ;)Dr. Tuftehttps://www.blogger.com/profile/17397586052171706438noreply@blogger.comtag:blogger.com,1999:blog-7169279.post-22519177612203660132011-09-25T14:50:28.086-06:002011-09-25T14:50:28.086-06:00Dr Tufte made a good point about price ceilings in...Dr Tufte made a good point about price ceilings in the previous post. I was using the term incorrectly. After studying economic price ceilings more closely I found that an economic price ceiling occurs when a government puts a legal limit on how high the price of a product can be.<br /><br />There are two types of price ceilings one binding and one non-binding. If a price ceiling is set below theSamhttps://www.blogger.com/profile/06014845996113752455noreply@blogger.comtag:blogger.com,1999:blog-7169279.post-59103726223156431762011-09-25T13:31:15.576-06:002011-09-25T13:31:15.576-06:00This comment has been removed by the author.Samhttps://www.blogger.com/profile/06014845996113752455noreply@blogger.comtag:blogger.com,1999:blog-7169279.post-81525284287286766552011-09-18T22:55:54.501-06:002011-09-18T22:55:54.501-06:00Sam, this is an incorrect use of "price ceili...Sam, this is an incorrect use of "price ceiling". I get the idea you're trying to get across, but when we talk about a ceiling we're usually talking about some involuntary constraint on transactions rather than the preferences of just buyers.<br /><br />Believe it or not, what you are saying is that the demand for used cars has gotten more price elastic (I think we all agree Dr. Tuftehttps://www.blogger.com/profile/17397586052171706438noreply@blogger.comtag:blogger.com,1999:blog-7169279.post-13690632440340156552011-09-18T15:47:19.320-06:002011-09-18T15:47:19.320-06:00I think there is another economic factor that is i...I think there is another economic factor that is influencing the higher prices of used cars in today’s economy. For many consumers a new car is out of the question because either they lack the cash to purchase a new car, or they lack the credit needed to acquire a loan to purchase a new car. Consumers that lack cash and credit effectively have a price ceiling that they cannot go above as they Samhttps://www.blogger.com/profile/06014845996113752455noreply@blogger.comtag:blogger.com,1999:blog-7169279.post-28353032126106261742011-09-16T11:42:06.484-06:002011-09-16T11:42:06.484-06:00I don't know any specifics here, but the inter...I don't know any specifics here, but the interrelationship within the fuel and auto industry tend to be really inelastic. So I'm not sure this would be too big an effect.Dr. Tuftehttps://www.blogger.com/profile/17397586052171706438noreply@blogger.comtag:blogger.com,1999:blog-7169279.post-10911752851094234862011-09-15T22:12:12.630-06:002011-09-15T22:12:12.630-06:00There is also another determining factor in this s...There is also another determining factor in this situation I believe. The compliment association between fuel prices and the purchasing of cars. In large part, we should be happy that the price for a barrel of crude hits some resistance everytime it tries to poke its ugly head through the $90 per barrel mark. Just a few months ago we had a scare that crude was going to $200 a barrel. If that Landohttps://www.blogger.com/profile/17690706844494470562noreply@blogger.comtag:blogger.com,1999:blog-7169279.post-53008893180097741112011-09-14T11:19:45.521-06:002011-09-14T11:19:45.521-06:00There is a tight definition of luxury and inferior...There is a tight definition of luxury and inferior goods: income elasticity greater than one, and income elasticity less than zero. The trick is measuring the elasticity. In general, you can't do this for a single item like your car.<br /><br />There isn't a tight definition for a durable. It's something that is used for more than a year, and delivers a fairly steady stream of Dr. Tuftehttps://www.blogger.com/profile/17397586052171706438noreply@blogger.comtag:blogger.com,1999:blog-7169279.post-32825348030408010482011-09-13T21:54:33.035-06:002011-09-13T21:54:33.035-06:00For someone like me who is currently listing a use...For someone like me who is currently listing a used vehicle for sale, your post is hardly reassuring! Maybe I won’t find a buyer as quickly as I’d like after all? I originally listed the vehicle at high blue book value for a private party resale and the demand was low. As I’ve adjusted the asking price, it’s been interesting to watch demand rise as more and more phone calls have come in. ThisAaronhttps://www.blogger.com/profile/04751496655911280085noreply@blogger.comtag:blogger.com,1999:blog-7169279.post-36617142513446390532011-09-13T12:08:30.862-06:002011-09-13T12:08:30.862-06:00I think what you're driving at here is that th...I think what you're driving at here is that the income elasticity of new cars is higher than that for used cars. This means that the demand for both shifts left in weak economic times, but the demand for used cars shifts more.<br /><br />Something to also consider here is the discussion of durable goods demand and elasticity. This text does a better job than most of covering those in ChaptersDr. Tuftehttps://www.blogger.com/profile/17397586052171706438noreply@blogger.com