Thursday, June 23, 2011

Vanity, Thy Name is License Plate

If you look in today's edition of The Wall Street Journal, you will find this amusing "puzzle" to share with your students. The set-up, Marshall and other 19th century economists noted that producer cost was the sole basis of price. Consumer value had to play a part, as well.  Essentially the consumer's willingness to pay had to relate to the utility they received.

What utility is received from a vanity plate?  I was taught that there were three kinds of utility - form, place and time.  I have my idea, but I'd be interested in your thoughts.

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