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A useful example to depict utility considerations

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Wheylous Posted: Fri, Sep 14 2012 2:38 PM

I just realized today a good example to show what scarcity makes us do.

I just saw that I have 3000 emails on my account. Why, I ask myself? Well, I don't have a limit on the amount of junk I can keep! Before, emails used to be limited to like 100 megabytes. Hence, we would economize the space in our email. Now, however, there is no scarcity of storage space (so to speak), and so we do not economize the space in any way besides the consideration for clutter.

You can explore a lot of interesting utility concepts through the limited-space scenario.

What emails did we keep? Well, emails which we both were interested in but also emails which were more important than possible future emails that we would be prevented from receiving if we hit the limit.

Hence, the space we leave over is a capital good, a future good. Furthermore, it is an entirely specific capital good - to storage of emails and their contents.

It is also not tradable. In a way, we are Crusoe.

It is also interesting that we also can invest time to clean out our inbox and gain both the good of "extra space" and "cleaner inbox". Arguably, we are both gaining more individual bits and we are creating a new good - "uncluttered inbox." Furthermore, we need to consider the tradeoff between time involved and clutter removed.

I think this is really cool. I feel like economics has really touched my life.

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