I know that I told you that Economics was not really the "dismal science." However you may have other ideas once you read this article about the Economics of Christmas. Read the article and answer the discussion question at the end that corresponds to the number that you receive in class. Have a great week.
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5) Although it may should better, having an Economistmas breaks old tradition and the gift of "giving." The main concept behind the Economistmas is that there will be no more actual gifts because money, which everyone would like, will obstruct what Christmas should be about. The idea should be "it's the thought that counts" and not greed. Besides, it is always fun to unwrap gifts that could contain almost anything.
5) While either extreme has its benefits and problems, I believe the ultimate solution will be one of mediums. Not normal Christmas, where some gifts go unappreciated due to poor judgement on the giver's part, and not Economistmas, where everyone is "happy" but the spirit of the season is dead, either. Rather than one extreme or the other, I believe that the ultimate solution for winter holidays would be gifting based on request. Receivers create a list, and givers are able to choose and still surprise the giftee without any chance of an unwanted gift.
3)Dead weight loss is the gift receiver‘s view on the cost of their gift subtracted from the giver’s view of the cost of their gift. The giver’s cost is based on all their effort that went into buying their gift. The majority of the times, according to this blog, people who are giving gifts view their gifts as way more valuable than how the receiver views them. During Christmas time, many people waste their money on gifts that people are going to not appreciate and see as worthless. Holiday gift giving becomes inefficient from dead weight loss.
2. The marginal benefit is often less for the receiver than the giver because the receiver often believes that the person who bought the present wasted their money, and they could have used that "wasted money" on something they actually believed was worthwhile. The person who purchased the gift, on the other hand, most likely spent hours of time and effort, possibly getting into a fight in the process, just to get you that horrible gift that you have no interest in using. This can cause relationships to be wounded because the receiver of the gift is not as appreciative as the shopaholic mother/grandmother/girlfriend, hence "negative social benefits". From an overall stand point I can strongly relate to the article because I am usually on the useless gifts end.
3. Dead Weight Loss: The marginal cost of the effort put into a gift outweighs the marginal benefits the receiver gets. This happens during Christmas when we spend all of our money, time, and effort in the malls shopping for a gift and then the benefits to ourselves are far less than the marginal cost.
4) Cash gifts are more “efficient” than buying presents because the receiver can pick whatever they want. Though gift cards/certificates limit to the person to a certain store, it’s still more effective than buying presents. The receiver still gets to pick what they want as oppose to receiving a lame gift. In the end, Cash is more effective than gift cards/gift because it’s easier to handle and use.
Dead weight loss is a term used to explain the difference between the gift giver's marginal cost of going out of their way to buy a present for the gift receiver, (based on their self-interest decision they buy the gift) and the marginal benefit being less than the marginal cost when the gift receiver does not like the gift and sees it at a cost much less than it really is. Holiday gift giving is parallel to the concept of dead weight loss;other resources used for all the effort of buying a gift for another person, could have been used for something more worthwhile if the gift receiver does not like the gift.
3) dead weight loss: the marginal cost of shopping for and buying Christmas presents exceeds the marginal benefit of those who receive them. In gift giving the giver values the gift more than the receiver so that more resources are put into buying the gift than should be.
4) Cash gifts are more "efficient" than buying presents because the recipients of cash gifts can spend the cash in any manner to satisfy their wants. There would be no dead weight loss. Gift cards and gift certificates are also more "efficient" than buying presents because the recipient still has options as to how to spend the money, though the cards and certificates may limit the person to a certain store or service. However, cash is still more "efficient" than gift cards or certificates because with cold cash, a person can do whatever he or she wants with it, whereas with gift cards, a person is limited, and there may also be dead weight loss, supposing the gift card is for a store the recipient does not like.
1. Christmas time is a market failure because inefficient exists due to the fact that goods are being wasted on products that people do not want. They are being wasted on products that do not please the receiver and therefore creates dead weight. These goods could be used to produce something that will benefit the people and therefore benefit the economy.
5) I think he missed the point of the Christmas season and failed to take into account several major economic problems his Economistmas would cause. It may be more "efficient" to just send money but not once did he mention how his Economistmas would hurt the economy. The retail business spends millions of dollars on personnel and advertisements to draw in the crowds. The businesses would be rather upset if only money was exchange. For the economy to benefit Economistmas would have to move earlier so everyone would receive the money of their "thoughtful gift" in order to purchase goods produced by the stores. What about the millions of ammericans that are hired during the Christmas season. How will higher unemployment help the country? Economistmas would hurt the economy more than it would help.
Dead weight loss is the amount of inefficient money that is spent on a gift. It is simply the difference between the cost the reciever values the gift at and the value of the gift to the buyer. When giving a gift, except from cash, it is almost inevitable that there will be dead weight loss. The giver of the gift that put alot of time into selecting it will always value the gift more than the reciever because the reciever alone knows what he/she wants, anything less is disappointing and not as valued. The holiday season Christmas that prompts the buying of unwanted gifts is also the holiday with by far the most dead weight loss.
Mine was #3 by the way.
4. Cash is more an "effective" gift because it would be easier for the giver and the receiver gets to choose what they want. when a buyer buys a gift, it is not a 100% guarantee that the receiver would like the gift. It is also said that the marginal cost of buying the gift exceed the marginal benefit. A bonus for giving in cash is that the buyer didn't have to waste any time shopping. Also the gift cards/certificates have a limit for purchase. this narrows the receiver's interest of buying. The problem with buying a present is that, for example, when you by a $85 cashmere sweater for the receiver, the receiver might think that it is only worth $1.50. maybe they didn't want this gift, so they would do their best to not like the "present".
The idea of giving the love ones what you want only benefits you not the person who recieves the present. Replacing Christmas to get exactly what you want ruins the excitement and eagerness. Although having everything you want would be nice, it ruins the reason of exchanging gifts. The feeling where you could not sleep thinking about the different things you might recieve can never be replaced.
4.) Cash gifts are more efficient than buying actual presents because they eliminate the chances of having dead weight loss. Gift cards or gift certificates are essentially cash within a card, therefore they would be more efficient gifts than actual presents. That being said, gift cards/certificates can only be used for specific stores (and the person receiving the gift card may not like the store) whereas cash can be used anywhere, so cash is still more efficient than gift cards/certificates.
1) Gift giving can be considered a market failure because products are made, purchased, and given; and the reciever does not have any interest in the gift at all. Therefore, the product that was pruchased goes to waste and becomes dead weight. The time wasted to make these undesired products could be used on other products that people actually want and will use.
2. The marginal benefit of the gift giver is often times greater than that of the gift receiver because the amount of time, money, and effort getting that gift spent by the giver, can strongly outweigh the appreciation and love of the gift given to the receiver. When a gift giver is over excessively giving gifts to their friends and family, often times the amount of appreciation given back is very low, now equaling the cost of the gift. This causes negative social benefits between the 2 people.
2) The thought put into the purchasing of a gift comes from the gift giver, not the receiver (who, according to Welker, is the only person who knows exactly what he or she wants). Therefore, any purchased gift will actually be worth more to the buyer and will thus buying it produce a greater marginal benefit for the giver than the receiver.
4) Presents are less efficient than money because they require a degree of effort for the giver in choosing what he "thinks" the receiver is going to benefit from. In reality, the receiver is the only one who knows what he/she wants the most (greatest marginal benefit)and consequently will not get the maximum satisfaction from the original giver's gift. Gift cards fall into a category of efficiency that lies between gifts and money. With gift cards, the receiver is not entirely restricted because he/she can buy anything he wants from the appropriate store. While the receiver is strictly bound to that particular store's products, giving the receiver less of a choice and thus less efficiency than with money, the receiver will surely value some products at that store more than others. This gives the receiver a range of "satisfaction", if you will, to choose from. The receiver will be most efficient by choosing the most valued object in that given range. Ultimately, the more choice given to the receiver, the more efficient the system, so depending on the gift card's designated store, even some gift cards will yield more efficiency than others.
3) Dead weight loss is the marginal cost a giver goes through in selecting a gift for someone that exceeds the marginal benifit of the receiver. The holidays almost always end in dead weight loss because the giver believes that the gift he or she has chosen has a far greater value than the value the receiver perceives.
4) The benefits enjoyed by the gift giver would be transferred to the person receiving the gift. The marginal benefit of the cash or gift card gift would then be greater than the marginal cost, which could be seen through the same graph as presented in the article. There is no dead weight loss, and instead the person receiving gets the full benefit of what they receive. With Cash, no time is wasted, and the efficiency is much greater- on both ends. In using gift cards, the result is almost similar except that it still limits the receiver in what they can choose, and thus the marginal benefit might not be as high, as seen in how much money goes unspent from gift cards. The economist could then see the dead weight loss that occurs and compare that to cash, which rarely would just "sit around" but will most likely get spent fairly soon. They could compare it by seeing how much is spent from each source and comparing percentages of the two.
1) Whenever we buy a gift for someone else it is ultimately for our own benefit. Many of the gifts that are received for Christmas will be valued much less than the amount of time, money, and effort that was put in by the gift giver. Thus, the marginal benefit of a gift giver is often times greater than the marginal benefit of a gift receiver. This results in negative social benefits because it exceeds the socially optimal efficient level, at which the marginal benefit of the gift receiver intersects the marginal cost of gift production. Giving too many gifts also results in this phenomenon.
4. Cash and gift certificates are more 'efficient' because they can never be wasted...unless the gift certificate is to a random place like the Pillow Palace. When someone receives cash, you know that the money will be spent and put to use. However, if you buy someone a specific present, there is always the chance that they won't like or use it for a short time before giving it away.
Cash > gift cards/certificates when it comes to efficiency. Again, cash can always be used, but if the gift card is to a specific place that you never go to, it might be wasted.
Oops I mean 2)*
4. Cash gifts are more efficient than actual presents because the receiver can basically satisfy their wants by buying things they desired. While with presents, there is no absolute guarantee that the person will like it. The marginal benefit of cash would be saving time and effort, and thus eliminate the dead weight loss. Compare to Cash, gift card and recipients are not as efficient because they are limited to a certain store. Unless the giver is sure the receiver will shop at that particular store, otherwise, gift card and recipients are just as inefficient to presents.
1. Holiday gift giving is a failure for various reasons. First of all, people spend endless hours in the stores and waiting in line in order to purchase something for someone even though one is not sure if the receiver will be 100% content with their gift. Second, all that wasted time could be utilized for more productive things such as studying or cleaning the house. We might spend a large amount of money on something that is not even going to be worth very much to the person we give it to.
3) Dead weight loss is the wasted value of a gift. It is calculated by the value the gift-getter puts on the gift minus the value the gift-giver puts on it. Because people buy what they think the other person wants, sometimes the gifts are not wanted by the reciever. This leads to dead weight and causes inefficiency.
3. Dead Weight Loss is the marginal cost of the effort put into a gift which outweighs the marginal benefits the receiver gets. This happens during Christmas when people spend all of their money, time, and effort in the malls shopping for a gift and then the benefits to themselves are far less than the marginal cost. Making the shopping at the mall worth much less.
2) The reason the benefit to the gift giver is greater than the gift receiver is that while the gift giver fells like he has accomplished something when he gives the gift and receives the fake thanks, the gift receiver does not feel anything of the sort. The value of the gift to the gift receiver is lower than it is to the gift giver.
3) Dead weight is the loss of resources that went towards producing and purchasing a gift for someone who doesn’t even like the gift, and all the other possible ways those resources and that money could have been allocated. It’s when the marginal cost far outweighs the marginal benefit of either the giver or receiver and it leads to an economically inefficient Christmas. Holiday gift giving results in dead weight loss because the giver doesn’t know exactly what the receiver wants. Therefore, the value of whatever gift the giver gives, unless it’s money, runs the risk of being undervalued in the eyes of the receiver because the gift is not what the receiver desired.
Cash gifts are more efficient because the person who receives it will mostly enjoy what they get. And besides it saves time for the buyer. In the end, giving cash for Christmas is an efficient way to save time and let the receiver happy.
5. First and foremost, Christmas is a Christian holiday originally created to observe and celebrate the birth of Christ. The whole idea of gift giving comes from the three gifts that were given to him on the night of his birth. Our society has taken that concept and taken it to whole new level, ignoring the true meaning of Christmas and adding extra emphasis to giving and receiving gifts. Furthermore, if we did do away with Christmas and implement this idea of Economistmas solely to relieve the dead weight loss of the holiday, we would ultimately be hurting our economy even further rather than helping it. All of the funding for advertisements, especially in department stores and malls, would no longer be needed causing businesses to lose a ton of money and possibly increasing the unemployment rate for part-time or seasonal workers.
1) Christmas time is a market failure simply because resources are not being allocated efficiently. The random factor in receiving gifts from others results in unwanted gifts that are either left in a closet, re-gifted, or returned to stores where the products fate varies on whether or not the product has a resale value or is restricted to holidays only. With these gifts, resources are misused and ultimately useless.
The market becomes a failure because any gift you can buy for someone else will bring them less benefit than a gist they purchase they themselves. You can never fully buy a gift that will satisfy who you are giving the gift to. The only way to get around that is to give cash.Therefore the marginal cost of buying a Christmas present goes beyond the marginal benefit of people who get them.
2) The marginal benefit of gift giving is greater than the marginal benefits of gift receiving because the buyer can never completely satisfy the receiver. Therefore if a recipient of a gift is unhappy with his or her gift, he or she is stuck with that unwanted item in addition to the disappointment while the gift giver can simply sit back and enjoy their holiday because their obligations of buying a gift has been fulfilled. This could leads to negative social benefits because buyers can just go for a really expensive gift because they believe that the more expensive the gift, the happier the recipient. This is not necessarily true as what may cost $100 to the buyer may not be worth $20 to the recipient.
Sorry! I don't know if I can turn in things late, but here's my post anyway:
#2) The marginal benefit of the giver often exceeds that of the receiver because the giver is presenting something that does not appeal to the receiver. In other words, while the giver believes that the gift he or she is giving is worth gold, the receiver might just pass it off as trash. Therefore, the giver, having the marginal benefit of receiving a gift and feeling as if he made the receiver happy, exceeds the marginal benefit of the receiver, who is trying to thank the giver for something he does not even like. This negative correlation thus reveals a negative social social benefit.
3) Dead weight is the subtraction of the receivers value of the gift the giver is giving from the giver's value. This common occurrence occurs frequently as givers often place much more value in the gifts they give than the people who receive them. Due to this event holiday gift giving has become dead weight
1.Christmas techincally is a market failure if you consider the time a person spent looking for the gift, waste of potential labor time, and the resources used on the gift if someone doesn't even want it. An unwanted gift will go unused and sit around gathering dust when someone else could have actually used it; it's a complete waste of resources unless you know the gift receiver will actually get use out of the gift.
A market failure in economics exists whenever resources are allocated inefficiently
towards the production or the consumption of a certain good. Holiday gift giving is a
marketing failure because of the concept between marginal cost and marginal benefit. Marginal cost is the total cost that arises when the quantity is changed by one unit. Marginal benefit is when a utility is gained or increased from a good or service. In
comparison with holiday gift giving, the marginal cost exceeds the marginal benefit. This shows that more money is spent on a gift than the actual benefit or cost of
receiving that gift. This describes how the resources are inefficiently allocated.
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