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I have been studying the ABCT for the past two months, and while most of the theory makes sense to me, there is one that puts me in doubt. As argued in the ABCT, an increase in the proportion of savings against consumption leads to the addition of new stages to the production structure. What I'm skeptical about is: when we assume increase in savings
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Hi guys, would be glad if someone could help me understand ICOR better. As far as the basic definition goes, it's the ratio between investment and the resulting growth rate in an economy. Firstly, I am not sure if the investment here (as the numerator) refers to nominal monetary financial investment during a year, or the actual amount of fixed capital
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Ansury, I would like to know how you gauge whether a good is rivalrous or not. Since me breathing air from the atmosphere doesn't restrict your ability to breathe air, is that a good enough reason to believe air is not rivalrous and hence nobody can claim ownership over it? Or is rivalry better defined when it is gauged on the basis of a person's
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Student is one of the smartest guys in this forum, and very very helpful. But what makes him the best is that he is not snobbish, unlike many other pricks over here. Cheers!
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gotlucky, I thought about this issue for a while and I think I have the answer. It has to do with the assumption that a monopolist knows somehow what the revenue-maximizing supply of goods is. That now looks like a naive assumption. So if company X is going to meet a private PDA or court and tries to strike a deal to provide it a monopoly privilege
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gotlucky, I'm honestly not convinced.
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HabbaBabba, the very premise of competing PDAs and law-providing agencies is that it would bring about laws that are economically-efficient. Now, yes, if some guy is going to pay big to get a law that allows him to destroy people's property, such situations are very unlikely because the groups that are bound to lose their property due to such a
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gotlucky, I am not implying that the huge PDA will suppress other PDAs in the business. I am merely saying that it is in the self-interest of the smaller PDAs themselves to enter into a bargain with the PDA which bargains for a law that favors the monopolist. It's all part of the market process with no conflict involved between competing PDAs or
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gotlucky, I am not even assuming there is just one PDA and a single court system. I am giving all the room for other competing PDAs and competing courts to do business. Only that I think the competing courts themselves would bargain and still come up with laws that favor the monopolist who wants them to recognize his IP rights. The reason is simple
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Suppose I have this exotic technology which nobody else possesses. I set out to make money, so I want to make sure nobody who buys my product or otherwise gets to use my technology and increase the supply of my products, drive down prices and eat away my profits. So what I do is go to one of the largest Private Defense Agencies in the region, tell them