Economics and the mid-life crisis have much in common: Both dwell on foregone opportunities

C'est la vie; c'est la guerre; c'est la pomme de terre . . . . . . . . . . . . . email: jpalmer at uwo dot ca

. . . . . . . . . . .Richard Posner should be awarded the next Nobel Prize in Economics . . . . . . . . . . . .

Friday, August 26, 2005

Shifting the Isocost Inward and addressing the Peak Load Problem

When an entity chooses an isocost line that is closer to the origin [econ-speak for spending less money, cutting the budget], the optimal reaction is ordinarily to use less capital and less labour (assuming neither input is "inferior"). That is what happened in a region in Norway (thanks to MA for the link):

Area police have had their fleet of vehicles trimmed from two to one due to budget cuts, and have repeatedly had to ring a taxi when needing another car to respond to a call, NRK (Norwegian Broadcasting) reports.

The mayor is so exasperated that he is considering donating a kick-sled to the force for the winter.

One question that remains unanswered in the article is why they decided to cut back on cruisers in the first place.

But regardless of why they made that decision, the use of taxis to meet the peak-load problem is ingenious.
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