Today I'm going to begin a new series on basic economics. I'll be using real world examples as well as pulling examples from Magic the Gathering. This is meant as a brief introduction to economics and not a substitute for an economics class or to dispute the finer points. Examples are for illustrative purposes and as a teaching lesson.
Let's take a look at two cards from the recently released New Phyrexia expansion: Omen Machine and Spellskite. Why is it that even though the same number of each has been printed, one has already been relegated to the bargain bin and the other has been touted as an instant classic? Why is it that one can purchase multiple copies of one card for well under a ticket and the other one costs more than an average dinner at an average restaurant?
Because Omen Machine stinks and Spellskite rocks I can hear you say.
I know that and that brings me to this economic point: Supply and Demand. The supply of each card is the same yet because the demand for Spellskite is high, and the demand for Omen Machine is low. Therefore, the price for Spellskite is high and the price of Omen Machine is low.
While this may seem like an intuitive thing to realize, this has applications in everyday life. Part of the reason the price of gasoline is increasing is because the demand for oil is increasing. When the IPad 2 was released, the demand for the original IPad deceased, which is why you can find the original IPad on sale for far less than its list price.
It's a simple lesson, but an important one. Most of economics flows from that principle.
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