Tuesday, May 18, 2010

Pop quiz

One commenter on Megan McArdle's blog offers up a pop quiz:
If I make widgets for a living, and the total cost of the components that make up those widgets (parts, raw materials, labor) equals $20/widget, and then the government, while demonizing me in left-wing media as "greedy," orders me to sell them for $10/widget, then what will I do? A) work at a loss until I starve to death, a glorious martyr to the wonders of command-and-control economics; B) use magic unicorns and alchemy to create something from nothing; C) pay off the politicians and bureaucrats whose whims determine my fate and get special exemptions and rents; or D) stop making widgets.

If you think A or B are more likely than C or D, then you have failed the test.
It's a useful exercise for those who favor government dictating the price of health insurance.

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