The Eco Kid

The power of marketing…

Say you bought a 13 inch MacBook Pro in 2010 for $1399, how much would it be valued at now, in mid-2011?

MacBooks depreciate at a slower rate than any other laptop for the same reason that they are relatively more expensive: there are very limited substitutes.

For example, you’re in the market for a Apple laptop, you have the choice of a simple MacBook, MacBook Air or a MacBook Pro. At the moment, there are ONLY three different models to choose from. However, let’s say you prefer a regular laptop. You can choose from Dell, HP, Toshiba, Sony, Acer, Compaq, Samsung, Asus… the list goes in. Each of these companies would each produce a handful of different models too, meaning that literally hundreds of different types of regular laptops exist on the market.

For this reason, Apple can pushed up the price of their products; their demand elasticity is relatively inelastic (that is, they lose proportionately less customers with an equal rise in price) and there are exceptionally few substitutes. This cannot happen in the regular laptop market, where hundreds of substitutes call upon fierce competition and therefore lower prices.

So, for the same reason, people are able to resell MacBooks relatively dearer than their regular laptop counterparts. The demand for them is high enough so that people will still pay thousands of dollars for them, regardless of whether they are second hand or not.

Of course, Apple has a monopoly in the MacBook market, and needless to say, people are being ripped off when purchasing their products; but will this deter you from doing so? I don’t think so.

“Why do we have taxes on cigarettes and alcohol? Things we actually use… Why not tax things that we don’t use… Like Ferraris, yeah, I’ll never have a Ferrari… A triple tax on Ferraris!”

- Some bogan watching the football.

Yes, yes I did hear these exact words. It was most certainly cringeworthy. Clearly unaware of the benefits of tax and the principles of an excise tax, attempting to lessen the extent of negative externalities.

Don’t even get me started on the “triple tax”…

Today at my work I overheard an obnoxious man explain how an immigrant friend of his from the UK was unable to remain in Australia due to the fact that his annual salary was not over $55,000 - this was apparently the figure that the immigration department labelled as sufficient to support yourself. This ignorant gentleman then proceeded to say that ANY man could support himself and his family adequately from $30,000 a year…

The Henderson Poverty line indicates the amount of income necessary to sustain a minimum acceptable standard of living… For a family, it is around $756 a year, totalling to $39,312 per annum. Apparenlty it was possible to live acceptably 31% under what the Australian government regards as the minimum…

Perhaps he makes a point. He was suggesting a boarding house (for $150 a week), etc. But ultimately, it comes down to what you believe is acceptable… What is the absolute minimum? Personally, I couldn’t stand living in a boarding house…

$30,000 a year won’t even allow you to put a deposit on a mortgage for a shed, let alone support a family.