Bastiat's Bastions

Here is a nice article from the Baton Rouge Advocate on natural gas suppliers adjusting to lower prices.  In the article, you will see two main ideas discussed.  One is how technology has changed the producers’ costs.  The other is how price changes have affected drilling.  Which changes supply, what in class we have called “shifting supply?”  Which causes changes in quantity supplied without changing supply, what we have called “sliding along supply?”

Let’s remember this article when we look at firm costs in chapter 13.

-MC

We have, so far, treated the wireless spectrum as a free resource, expanding use until hitting the brick wall of scarcity.  Take look at this article from CNN Money by David Goldman.  If we treat it as a free good after it becomes scarce, some who have unimportant uses will eat up the airwaves while those who have very important uses will not be able to access their cell sevice, or it will be severly degraded service.    It already looks as if some are “hoarding” their spectrum holdings while soon, others will not be able to make important calls.  Pricing the spectrum would help us use this scarce resource more efficiently. 

“The FCC has also been working to free up more spectrum for wireless operators. Congress reached a tentative deal last week, approving voluntary auctions that would let TV broadcasters’ spectrum licensesbe repurposed for wireless broadband use….The good news is that there are ways to buy time. Several innovative approaches are in the works, and there’s a decent amount of spectrum out there that could be turned over to the carriers’ possession.  The bad news is that none of the fixes are quick, and all are expensive. For the situation to improve, carriers — and, therefore, their customers — will have to pay more.” (from the article cited). 

-MC