Christmas time is generally considered to be a great time of year, by the average person. In some regions, we experience snow. There are lights up all over brightening up cities and bringing joy all around. For many people, it is a chance to see family that we don't always see and people are brought together. However, beneath this joy, there is a hidden side of Christmas that only economists see.
Christmas time is economically, a very wasteful time. Everyone who celebrates Christmas has experienced the pain of receiving a gift that you do not want. For example, if my grandma were to buy me an ugly sweater I would never wear, there is waste all around. In this scenario, she has wasted her money, and could have spent it on something else that would derive greater utility. Additionally, the resources that went into making the sweater have also been wasted, and could have gone to something more meaningful. Waste is seen in many other areas as well, especially for companies. December is the most shopped time of the year and this causes surpluses in many areas. Workers, resources, and anything needed to produce a good are needed excessively during this time. However, this is only for one month and from an economical standpoint is rather inefficient. Unfortunately, there is no real solution to this problem as many Americans are unwilling to Christmas shop in other times of the year, in a more spread out manner, and it makes sense to not want to do this.
There is a different side to the increased activity during this time of year. This time of year provides work for many, although limited in time. Additionally, the economy gets a boost during this time of year, which helps everyone. Another reason for this being good is that companies get popularity boosts and sales skyrocket. In the end, whether people decide to support that Christmas time is wasteful, or that Christmas time is good for the economy, there is one thing we can all agree on... no one wants an ugly sweater that their family buys for them and makes the wear.
Thursday, November 29, 2018
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This is a very interesting post that relates marginal utility of receiving a product with the price of the product. As with all gift giving, there are many times when you don't like the product you get and want to return, meaning low marginal utility. As for the firms selling the product, this is one of the best times of the year as huge portions of their revenue comes from the holiday season.
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