Monday, May 2, 2011

California Vacation/ Ski Lift

p. 276-278

Barro took his family to Disneyland in California. The economic problem that he came home with was, why did the park have such long lines for rides? To Barro it was obvious, market failure caused the long lines at the theme park. He concluded that if Disney raised their prices, they would do better as a supplier. Barro and Romer were avid skiers and compared this to the lines to get on the ski lifts. They concluded that maybe the operators should charge to ride the life to solve the problem of free use for a scarce resource. They concluded that they were looking at the wrong aspect of it. They needed to look at the price per ride, instead of the daily lift ticket.

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