EWOT #12

My EWOT for this week has to deal with preferences, scarcity and surplus. I mentioned this topic in my blog post from class on 11/21/11 but it was not something that Rizzo mentioned in class. We learned today that scarcity does not always mean that there is a shortage of products. When talking to Rizzo after class, i was asking him about the difference between scarcity and shortages. From this he gave me a great example of Mike Tyson's house in Ohio. The house is worth $3 million dollars and has some extra value since it formerly belonged to heavy weight champion Mike Tyson. There is only 1 house of it's kind so it is very scarce. No one wants to buy the house that has been on the market since the late 90's. 1 of the reasons why no one wants this house is that it is customized to Tysons likings with tiger print carpets and a sundae bar by the indoor pool. This has to do with peoples preferences. Mike Tyson is one of few people in the US that wants Tiger print carpets and a sundae bar in his house, not to mention that the house is in the middle of no where. Since Tyson's preferences don't match up with anyone else's, the house is still vacant over 10 years later. Though Tyson's house is scarce since there is only one of them, there is a surplus of it because there is more of its kind than people want. I thought that this was a very interesting point.