Mar 04 2008
Free trade and low death rate = bad business
Published by Jason Welker at 10:16 pm under China,Comparative advantage,Competition,Cost-minimization,Free Trade,Trade
How do Chinese granite quarries and a decline in the US death threaten a family business in rural Vermont?
Listen and find out…
Source: NPR Economy Podcast, 2/29/2008
About the author: Jason Welker teaches International Baccalaureate and Advanced Placement Economics at Zurich International School in Switzerland. In addition to publishing various online resources for economics students and teachers, Jason developed the online version of the Economics course for the IB and is has authored two Economics textbooks: Pearson Baccalaureate’s Economics for the IB Diploma and REA’s AP Macroeconomics Crash Course.
Jason is a native of the Pacific Northwest of the United States, and is a passionate adventurer, who considers himself a skier / mountain biker who teaches Economics in his free time. He and his wife keep a ski chalet in the mountains of Northern Idaho, which now that they live in the Swiss Alps gets far too little use. Read more posts by this authorRelated posts:
- Free Trade Debate: to what extent has globalization based on free trade contributed to global economic growth and development?
- Mankiw on free trade in politics
- Fair trade vs. free trade: the problem with “dumping”
- McCain vs. Obama on the costs and benefits of free trade
- What’s Korea’s “beef” with the US on free trade?
First impression: they need to change the music in the beginning. It's like a throwback to I don't know when, but I do know I don't want to be there.
I do feel bad for that little Vermont industry. They can't keep up with the low prices offered by granite suppliers in China. I can't say much about the lower death rate though. On one hand, it seems like a good thing, because yay, people aren't dying as much. On the other hand, crap, people aren't dying as much and we have too many people.
I just reached the end of the podcast, and they need to change the music at the end, too.
Askjfaldjfbadmusicmakesmyearsbleed.
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So basically whats causing trouble for the family business in Vermont is competition posed by cheap imported Chinese granite and the fact that less people are dieing. Learned in micro economics, both of these conditions decrease demand. Cheap substitutes poses great competition to the family business as many rational consumers would choose cheaper products. The other factor, decreases in death rate, is pretty self-explanatory in terms of the nature that when people die less, people need less of the product that the family business has to offer here.
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