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Economics are very simple to understand. Granted, there are faux economists like Nobel-prize winner Paul Krugman who try to confuse people with false theories that last only until other people's money runs out. One of the basics of sound economic theory is the concept of scarcity, sometimes referred to as "there's no such thing as a free lunch" (TNSTAAFL). Anytime someone uses a resource, there is an associated expense. This applies to any value. It is competition that causes entrepreneurs to become more productive with resources, reduce costs, lower prices, and increase quality. When competition doesn't exist or is limited (e.g., forced monopolies), prices are high, quality is reduced, and there is limited supply. Observe basic economics in action.

FTA: "The most expensive city in the world is not in the North America, or Europe, or even the Middle East... it's in Africa... Angola was one of those unfortunate countries where the United States and Soviet Union duked it out, supplying their respective sides with money and munitions despite a UN prohibition against arms deals in the country... Three-star hotel rooms start at $750/night, apartments run $7,000/month, a silly cheeseburger can cost $30 or more, a haircut will set you back $150... This sort of price disparity is not unusual in Africa. Key cities are often severely limited in supply of expat-quality products and services... there might be only one hotel in the city with four walls and a ceiling, running water, and a mattress devoid of insects. When the economy starts booming, demand outstrips the limited supply and prices soar."

The most expensive city in the world


Original posting by Braincrave Second Life staff on Jul 15, 2010 at http://www.braincrave.com/viewblog.php?id=262

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