Econ 101: The Candy Show

September 26, 2007 at 1:09 am 15 comments

Every job has its perks.  Mine enables me to attend the annual All Candy Expo.  Chicago’s McCormick Place is taken over by wall-to-wall confections… and I get paid to walk the hallowed halls and sample the newest innovations.  Gum, Candy, Snacks… Last year the biggest trend was dark chocolate and printing the percentage of Cocoa on the package.  This year the flavor that EVERYONE is trying to get a piece of is Blueberry Pomegranate, which I find to be a lovely combination. 

As I walked down aisles 1 and 2, each little piece of Fudge, each sample of hard candy was an utter and complete delight.  I filled my bag like a overgrown, under-dressed Trick or Treater.  Aisles 3 and 4 came and I was still excited, but walking faster, taking fewer samples, and my excitement diminished with every aisle until I finally ended up skipping the last couple aisles.  My coworker one time referred to this phenomenon as the Law of Diminishing Returns.  I said, “More like the Law of Diminishing Marginal Utility.”  Like the cool kid that I am.

So, by popular request, I am addressing the difference between these economic laws.  Since I am not a economics expert (other than knowing the Law of Diminishing Marginal Utility when I see it), I went straight to IRF reader, Masters of Economics Candidate, Mikel, who quoted from his MIT Dictionary of Modern Economics:

Diminishing marginal utility is exactly like the candy example, usually though it has to do with purchasing something, but same idea. The more you have of something, the less valuable an additional unit is to you. The law of diminishing returns is more specific to production. So, if you have fixed capital and keep adding labor to it, your marginal and then average returns to labor will diminish after some point. You get less output out of an additional unit of labor, as you add more and more labor. Instead of too much candy, this would be like having too many workers and not enough computers. So, it is usually said “diminishing returns to labor” or “diminishing returns to labor with respect to capital”. They both describe curved functions, and the measure of the slope of a curved line. So, graphically they look similar, even though one is describing an individual’s utility function (convex), and the other is describing a production function (concave). They both measure the changing slope of a curved line. I think that pretty much explains it.

So there you have it.  Your first piece of candy is more highly valued than your 10,000th.  The law didn’t stop me, however, from topping off my bag with Almond Joys and Pomegranate Jelly Bellys (and Lemon Heads for Joey).  The Willy Wonka Soundtrack has that effect on me.

Thanks to Mikel for doing his part to educate our loyal readers on this important subject. And I’m here to answer any questions about gum and candy.

Posted by LeMare

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Entry filed under: Chicago, Fine Food, LeMare's Posts, Work.

Make it At Least Sound Like You’re Working Guest Post: Notes from the Field Part II

15 Comments Add your own

  • 1. TRussell  |  September 26, 2007 at 1:34 am

    This combination of subjects is sure to stimulate further research and commentary. Perhaps I can nominate Jen to be IRF’s dietetic expert and co-author a piece with Mikel entitled “Intuitive Eating and the Law of Diminishing Marginal Utility Within the Context of Candy Conventions: Adam Smith, Godiva, and S.W.A.G.y Curves”

    Reply
  • 2. Mikel  |  September 26, 2007 at 10:38 am

    I’d be glad to work with Jen on this important and worthy topic.

    I recommend the MIT Dictionary of Modern Economics to all, especially as the Christmas season approaches. Think of the joy on a young child’s face knowing that Christmas Day won’t be wasted with video games, but instead will be spent discussing putty-clay production functions, or learning what ordinalism is. Get yours soon.

    Reply
  • 3. Lowdogg  |  September 26, 2007 at 11:03 am

    That souns interes,,,hnuiowrifhwurfhwf0opiwhfnf

    Sorry. Fell asleep on the keyboard.

    Reply
  • 4. lemare  |  September 26, 2007 at 11:35 am

    Whatever, Lowdogg, we listen to you when you talk about long-term care policies and annuities.

    Reply
  • 5. Mikel  |  September 26, 2007 at 1:56 pm

    Come on, econ is all around you. Maybe this post just needs a few topless male missionaries.

    Reply
  • 6. Lowdogg  |  September 26, 2007 at 2:18 pm

    As Andre 3000 says, “Just playin’!”

    You will notice the total lack of financial commentary on any blog or SPOTD, but that is a regulatory issue more than a preference issue.

    I do appreciate economic theory Mikel. I just couldn’t resist the joke. What the post needs are topless economists.

    Reply
  • 7. JL  |  September 26, 2007 at 3:14 pm

    The All Candy Expo sounds like a perfect day away from the office. Did you happen to chance upon any Skor bars or 100 Grands?

    Reply
  • 8. lemare  |  September 26, 2007 at 3:51 pm

    JL, no Skor or 100 Grands, but I am currently eating a Reese’s Whipps, which is basically a hybrid between a Reeses Peanut Butter Cup and a 3 Musketeers. I may wash it down with one of those jelly fruit slices and try a bite sized 3 Musketeers Mint as a bedtime snack.

    Reply
  • 9. cburt  |  September 26, 2007 at 5:21 pm

    I truly feel smarter now.

    But you’re killing me. I just ate the Reece’s PB Cup I’ve been denying myself for 3 days. Sigh.

    Reply
  • 10. Jana  |  September 26, 2007 at 6:46 pm

    I am truly jealous of your job. The biggest perk I got working on Capital Hill was either the Canada reception (which gave away free maple syrup and a tee-shirt that I still wear to work out in) or the video game reception, which didn’t really give away much, but you got to eat grilled cheese while playing video games at work.

    My job was so lame!

    Reply
  • 11. Jana  |  September 26, 2007 at 6:47 pm

    Duh. Capitol.

    Reply
  • 12. Lindsay  |  September 28, 2007 at 2:32 pm

    Can’t think of one perk in working at a hospital. No free anything–except they’ll treat you for free if a patient injurs you. Generosity at its best.

    Reply
  • 13. lemare  |  September 28, 2007 at 2:56 pm

    Today I’ve eaten a Hot Cocoa flavored Hershey Kiss, a Reeses PB cup, a Chocolate and Caramel Creme Savers, and a cinnamon bear.

    Reply
  • 14. JL  |  September 28, 2007 at 3:32 pm

    That certainly beats my half bag of candy corns, LeMare.

    Reply
  • […] In Rare Form discusses diminishing marginal utility and visiting a candy convention. […]

    Reply

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