Ask an Economist

A commodity (let's say a vegetable like squash or tomato) that is grown in Mexico and transported to the US and is being sold at 1.29/lb.
After about a month when the commodity has less than 2 weeks of shelf life it may be sold at .69/lb and then discarded after another week.

1) Why would the store not further discount these items at let's say .30/lb to clear the complete stock? ( I understand it is so as not to let the global/US prices of the commodity go down.)
2) Is wasting better for the store than to sell it at a discount?
3) Even if customers stop buying fresh commodity and start to wait until the price goes down to .30/lb. Isn't it economically profitable to the store to actually sell it than waste it ?

Thanks

I have a question about the economic term “pricing power.” The term pricing power is often used to describe companies that successfully command big premiums for their products, like Apple. Can companies that compete solely on price have pricing power? For example, Wal-Mart charges lower prices than its competition because of its superior cost structure. Does Wal-Mart have pricing power?

In November 2020, India's oil basket price was 65$, WPI 2%, CPI 6.8%. In June 2021, India's oil basket was 70$, CPI almost the same 6.2%, but WPI soared to 12.2%. How is it possible? What can be the factors for a sudden increase in WPI when oil prices are almost the same and CPI is still the same?

When speaking of a dominant market position in economics, people usually only think about the abuse of a dominant market position. I decided to look for some answers to see if a dominant market position is acceptable, but I couldn't find anything. My question is: Can you give an example of when a dominant market position is acceptable?

How do I decide a particular field to focus on under economic careers ? Also what does an economist do in an insurance firm?

Hello, I'm currently a senior in high school trying to make my plan for life and I've been eyeing getting an MA in economics to then find a job. So I was wondering if you believe if it is worth it to get an MA in economics to find a good job and will I find a lot of competition? Yes, I believe I'm passionate in economics and such, since when I was in middle school I took an interest in the stock market. So I believe my future job to be in something regarding economics. I'm aiming for around 65k entry level and then sometime early-ish in my career hopefully finding a job that pays 100k+.

This is a two-part question.

(1) Can the Federal Government pay for something (like some fighter jets) just by electronically putting appropriated "funds" into Boeing's (or some other company's) bank account, without having obtained those funds in advance from taxation or borrowing? (I'm not asking whether this is a good idea, I'm asking if this is possible)

(2) Does the Federal Reserve ever give "cash infusions" to banks by just electronically increasing their reserves, without buying back federal securities from that bank? If so, doesn't this automatically increase the value of the bank's stock, and isn't this kind of a windfall to the bank's investors? (As opposed to reducing reserve requirements, or buying federal securities from the bank, which would seem to require the bank to then engage in useful economic activity (lending) in order to benefit the shareholders?

In the cartoon show "Futurama," we can see robots with AI spending money, thereby contributing to the economy. In a general answer, if we had AI sophisticated enough to garner "Human Rights" and receive wages for their work, how might this affect the economy, assuming 1 Robot/50 Humans.

Hello - I am doing research for a possible antitrust lawsuit and came across these very useful charts: https://www.pork.org/facts/stats/costs-and-prices/
I am wondering how I would go about finding the underlying data. Any help or guidance is appreciated.

I am a simple individual with little economic background trying to figure out (predict the likely future) of whether the national U.S. economy is likely to experience inflation or deflation after most states near completion of their vaccine rollout and travel opens back up. Theoretically, the massive quantitative easing and massive stimulus has drastically increased the money supply (https://fred.stlouisfed.org/series/M2) and should result in inflation. Granted, people have been saying the same thing since 2008 and inflation is still low. I have come up with 3 possibilities and would like to hear an economist's opinion.

1) money velocity is low but inflation will soon come when the economy opens up
2) CPI and PCE are broken and are not good measures of inflation. Inflation is already here but reflected in housing, healthcare, and equities instead of milk and eggs.
3) QE actually leads to deflation

1) I thought that perhaps the lack of significant inflation is due to the low money velocity (https://fred.stlouisfed.org/series/M2V). Perhaps once the economy opens up, people will spend more leading to an increase in money velocity, which finally leads to inflation. I have heard that people are saving more since restaurants are closed and travel is dead (https://fred.stlouisfed.org/series/PSAVERT) (https://fred.stlouisfed.org/series/PSAVE). I have also heard that the drastic rise in equities and real estate are due to people spending more on assets. However, if it is assumed that people are saving more, how can net savings as a percentage of national gross income be negative? (https://fred.stlouisfed.org/series/W207RC1Q156SBEA)

2) Perhaps CPI and PCE are broken measures of inflation. At least in California, food is slightly more expensive, housing (whether renting or owning) is very much expensive, and healthcare is stratospherically expensive. Perhaps there already is inflation and everyone is looking at the wrong measurements?

3) Is it possible that QE actually leads to deflation? The rise in equities and real estate has benefited those who already own these assets to begin with (i.e. rich people) and the bottom 90% of people are living off credit, stimulus, and savings. Rich people save more than they spend and thus have a negligible effect on money velocity. Poor and middle-class people spend more and make up 90% of the population; so if they had money to spend, they would spend it, thus increasing money velocity. Is it possible that the bulk of QE is going to rich people who just throw it at equities and real estate while the other 90% gain little from QE. Overall, aggregate demand would decrease for consumer goods. And as stuff that actually matters such as healthcare and housing continue their upward rise, the 90% would have even less to spend on consumer goods, further decreasing aggregate demand. I imagine this is the so-called K recovery. This theory would also explain why net savings as a percentage of GNI is negative. Assuming GNI is still positive (https://fred.stlouisfed.org/series/MKTGNIUSA646NWDB) (the latest data is from 2019), this would mean that net savings is negative and most of the U.S. population is surviving off credit. I imagine that the drastic increase in wealth of the top 10% skews personal savings and personal savings rate, though I have no idea how these are calculated on a national scale.

It is impossible to predict the future, but I would like to hear from an economic perspective why any or all of these theories are wrong.

My city has residential parking minimums and "bundled parking" so that the cost of parking is included in tenant's rent. This means that people without cars are subsidizing the cost of parking for people with cars. Some people in the city government want to unbundle parking so apartments can charge tenants for parking. Property owners would set the price of the parking. My initial reaction was that landlords would charge much more than the actual cost of parking, and make additional profit off their tenants, since, in most places, the only competing parking would be street parking. But now I'm not so sure. Presumably, car owners would consider the cost of rent + parking when picking an apartment, so that price would be subject to the same market forces as rent, so the profit for landlords wouldn't change very much. I guess my question is this: in the long run, would unbundling parking have a large impact on the profits of landlords? In the short term, is there a risk of price gouging, which would be politically disastrous?

Is it bad that the Fed discontinued the reserve ratio? Is this only temporary? Does this mean banks can create and lend out infinite amounts of money? I'm learning about this in macroeconomics (and the textbook is outdated of course) and I was surprised to find out that the reserve ratio is 0 now.