An Economist Explains (April 2011)

An Economist ExplainsMaximizing utility with marginal advice

Dear Economist,

My wife and I own Uncle Sam’s,a food truck here in DC. We have been filling the gas tank with premium for a number of years, but now my wife insists we have to cut costs by switching to regular. I say minimizing engine knocking is a nonnegotiable priority. Even though we take in $2,000 with a good lunch crowd, she’s threatening to shut down the whole operation over 15 cents a gallon. Whose fault is it if we’re not serving sloppy joes at 14 & K come Monday?

–Premiumly Pissed

Dear Premium,

Why not reach a deal to continue operating in the short run? The only real condition you need is for price to be greater than average variable cost. You can worry about the fixed costs of buying a more fuel-efficient truck in the long run, by which point I have a feeling divorce court will have ruled that you are 50% of total assets plus child support at fault here.


Dear Economist,

When I was stretching before a run the other day, I found that I could no longer touch my toes. How am I supposed to play competitive kickball on the Mall if I’m standing straight up even when I’m bending over?

–Inflexible in Arlington

Dear Inflexible,

Unfortunately, the more you value playing kickball the more inelastic you are bound to become. Don’t be surprised if they raise your league fee to $15,000 next season.


Dear Economist,

I was the hottest currency in the international system before that thing in the Middle East that I’m going to pretend didn’t happen happened. Now I’m feeling more underappreciated than ever. How can I fix this again?


Dear RMB,

A little floating can go a long way. Unfortunately, if you tried to float at this juncture it would undermine the no-fly zone. I’d love to help you out, but I think I’m going to have to abstain on this one.

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