In January 2024 , a federal judge blocked JetBlue Airways $3.8 billion deal to buy Spirit Airlines, rejecting a merger that he said would hamper competition and lead to higher fares. The ruling marks a victory for the U.S. Department of Justice, which stopped the JetBlue and Spirit deal from going ahead. The Data: Figure … Continue reading Federal Judge Blocks JetBlue’s $3.8 Billion Acquisition of Spirit Airlines
Author: Robin Bade
The Economics of Covid Testing
After waiting in line for hours to get a Covid-19 test at a test center, Patrick tried to buy a test kit at a pharmacy. Unable to find one, he turned to the Internet and bought five kits online for $20 each from his former classmate, Joey. In this post, we use the economic way … Continue reading The Economics of Covid Testing
Difficult Choices for California’s Hospitals
As the virus spreads, the number of Covid-19 patients in hospitals rises and the number of healthcare workers available falls. Hospitals must make difficult choices about which patients to treat—those with Covid-19 or those wanting elective surgeries. In this post, we use the economic way of thinking to analyze this problem in California. What do the data … Continue reading Difficult Choices for California’s Hospitals
Why is the elasticity of supply smaller in the short run?
A student asks… Why is the elasticity of supply smaller in the short run than in the long run? What is the elasticity of supply? The elasticity of supply is the responsiveness of the quantity supplied of a good to a change in its price, other things remaining the same. It is a units-free measure, … Continue reading Why is the elasticity of supply smaller in the short run?
Brewing a Fresh Pot of Price Changes
The International Coffee Organization tracks lots of data about coffee worldwide, and one trend is clear: coffee prices are rising. In this post, we use the demand and supply model to understand the market for coffee. What do the data tell us? Consider the following data table looking at the quantities traded and prices of … Continue reading Brewing a Fresh Pot of Price Changes
The Economic Way of Thinking about School Closure
Since the COVID-19 pandemic started, one of the most heated public debates concerns school closure. In this blog post, we walk through the way an economist would think about this public policy. What is the school closure tradeoff? In economics, scarcity refers to our inability to get everything we want. Scarcity is universal. Because we … Continue reading The Economic Way of Thinking about School Closure
Can something affect demand and supply?
A student asks… Can something affect demand and supply at the same time? What is demand? Demand is the relationship between the price of a good and the quantity demanded of that good. Demand is illustrated as a demand schedule or a demand curve. The quantity demanded is a point on a demand curve—the quantity … Continue reading Can something affect demand and supply?
Why is a PPF bowed outward?
A student asks… Why is a PPF bowed outward? Why isn’t it just a line? What is a PPF? The quantities of goods and services we can produce are limited by our available resources and by technology. If we want to increase our production of one good, we must decrease our production of something else. … Continue reading Why is a PPF bowed outward?
Can a statement be both positive and normative?
A student asks… Can a statement be both positive and normative? What is a positive statement? A positive statement is about what is. A positive statement might be right or wrong, and we can test it by checking it against the facts. “In April 2020, the United States documented its highest unemployment rate since 1948 … Continue reading Can a statement be both positive and normative?
Personal and Corporate Income Taxes
When a market transaction is taxed, its burden can fall on the buyer, the seller, or some combination of them. Just as in goods markets, there are buyers and sellers in the markets for factors of production. And the taxes on transactions in factor markets are income taxes. In a recent Forbes article, John C. … Continue reading Personal and Corporate Income Taxes