Sunday, April 23, 2006

Good coffee, good book

OK, a quiz for you. What can make an economist drop his/her strict working assumption that a firm is always to maximize profit?

Here is the answer: coffee. A very good coffee can make the undercover economist gives up such assumption. He wrote:

Except for my favourite coffee shop, the Monmouth in Covent Garden. They are short of space, and will charge mark-up for a large cappucino if you drink it in the shop. However they charge less for take-out coffee, and it comes in only one size. I have decided thy are far too nice to try to make profits

The Undercover Economist, Tim Harford, p 40

I share his opinion on favourite coffee shop. It's probably the best place for coffee. And for that Harford's book --I just got a copy of it three days ago--, that's a good read too. A delicious Econ 101, for you all. He tells you some very basic but commonly misunderstood concepts such as scarcity power, externalities, or comparative advantage in an accessible daily language. No, not that full-blown math. Recommended

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