75 Tax-Free Buckeroonies

[Marelo]

Why would I do that to my friend, Kate?

You are just despicable!

[Red Herring]

She is totally my friend too so I can be despicable!

[Marelo]

Oh, well, carry on then.

[Wheeeeeeatthins]

Hookers and blow.

I don't know. It's supposed to be tax-free. And deciding the quantities of how much of each is a very TAXing conundrum! Luckily, I'm here to help you sort it all out.

I'll start by graphing the relationship of quality gotten from a total amount paid for an option:

As you can see in figures 1(a) and 1(b), the total WORTH* of the blow and hooker experiences each only become substantial once they are high in COST. This is due to the rule of "You can't getta good blow if you ain't gotta the dough." So the worth of each is highest at the $75 mark.

*WORTH here is defined as the amount of enjoyment gotten from however much of the $75 is allocated towards one option


In Figure 2, I have juxtaposed Figures 1(a) and 1(b) to show the relationship of one to each. With it, it starts to become clear the TRADE-OFF buying one thing instead of the other has on overall WELFARE*.

*WELFARE is the overall personal enjoyment obtained after all is said and done.


Figure 3 simplifies this, graphing clearly the TRADE-OFF between the two options. One can see there is a high TRADE-OFF in buying one more dollar of one particular option over the other option that evens out midway, where DIMINISHING RETURNS takes over. Giving QUALITY in Figures 1(a) and 1(b) each a value of 1, we come up with the following values at price points A, B, and C:
A: 75 points of personal welfare (0 pts + 75 pts)
B: 30 points of personal welfare (15 pts + 15 pts)
C: 75 points of personal welfare (75 pts + 0 pts)
So we can see that it is best to specialize completely in either one or the other.

Conclusion: specialize. It is always wisest to pick one or the other, blow OR hookers, since these are both non-commodities where quality is tantamount to their enjoyment.

[Red Herring]

ugh i hate economics majors

[Yal]

Query: What if we scale back to strippers and booze?

[Wheeeeeeatthins]

ain't no economics major

I'm a freelance economist, righting econowrongs and being econostrong flexing my muscles of inelastic demand

EDIT: depends if you can find hookers who bring booze with them; also depends if drinking the booze will increase the perceived quality of a bad hooker

[GreyMario]

Someone's been reading too much XKCD.

[Wheeeeeeatthins]

Someone's been reading no XCKD

ever

[Yal]

Patronizing any sort of sex worker while sober is an unappealing prospect, and the prostitution market at this price range is a scary fucking place...

I'm going to say the sweet spot here is strippers and blow.

[Shadow of the Lotus]

I'm just going to say neither product would seem to follow diminishing marginal returns. Though this could be explained as the values examined are limited and we're not looking at the full extent of possible evaluations of utils begotten from blow and hookers. I'd probably make a graph showcasing further possible utility and create price constraints.

Edit: Damn it. I lost what I was going to edit this to. Bah. Oh well, second attempt at an edit.



Ok, cutting to the chase here. We have our two products. The negative linear line in the graph represents our budget constraint. No matter how much we wish to spend, we can't spend above this line. The more we spend on hookers the less we have to spend on blow and vice versa. Ok, I'm having trouble remembering the official name of the second thing, so excuse me here. It represents constant utility. In other words, it represents a fixed amount of utility (benefit or pleasure) derived from the products. This constant-utility curve assumes that the products in question demonstrate diminishing marginal returns; that is to say that every time you buy blow or hookers the amount of buzz you get from either is less than the amount of buzz you had from the last unit of either item. One hooker is a hell of a lot better than no hookers. With two hookers we might as well trow a fucking party, but the difference in benefit from having two hookers over one isn't as much of a difference as that of one hooker compared to none. From here we have a variety of constant-utility curves. The highest utility we can reach is the curve which is tangent to our budget constraint. The utility curves could look like any number of things depending on the benefit begotten from the items in question. The above curve assumes there is more benefit begotten from blow than hookers. The budget constraint line has a slope reflective of the marginal costs of the products involved and the constant-utility curve is equal to the marginal utility begotten from the products. Even if the marginal utility was highly shifter to one product or the other, it really shouldn't be an "buy all of one" sort of solution. The above graph would give you to buy more blow than hookers but to still buy both.

[Wheeeeeeatthins]

I was saying in product quality as it goes with trade-off. If you spend $75 on blow and $0 on hookers, you are going to have a very good experience with blow.
If you spend $70 on blow and $5 on hookers, you are going to have a not-as-good experience with your blow, and the experience with the hooker will contribute next-to-nothing to your overall welfare because seriously, a five-dollar hooker? What'll that do?

And on the other end of the hooker-blow spectrum...
If you spend $75 on hookers and $0 on blow, my god it'll be saturnalia all over again.
If you spend $70 on hookers and $5 on blow, you won't have as much fun with the hookers as before, and you'll get some really shitty blow because chances are half of the powder will be flour.

Then when it comes to the middle: $37.5 on hookers and $37.5 on blow makes for an average experience with each. I'm basing this on the assumption that both of these are not commodity items, and quality maximization is much more important than quantity.

[Shadow of the Lotus]

I was saying in product quality as it goes with trade-off. If you spend $75 on blow and $0 on hookers, you are going to have a very good experience with blow.
If you spend $70 on blow and $5 on hookers, you are going to have a not-as-good experience with your blow, and the experience with the hooker will contribute next-to-nothing to your overall welfare because seriously, a five-dollar hooker? What'll that do?

And on the other end of the hooker-blow spectrum...
If you spend $75 on hookers and $0 on blow, my god it'll be saturnalia all over again.
If you spend $70 on hookers and $5 on blow, you won't have as much fun with the hookers as before, and you'll get some really shitty blow because chances are half of the powder will be flour.

Then when it comes to the middle: $37.5 on hookers and $37.5 on blow makes for an average experience with each. I'm basing this on the assumption that both of these are not commodity items, and quality maximization is much more important than quantity.

You posted this before my edit, so I'll just stick to things in here. Even if we're referring to a single item and reference its quality as reflective of prive instead of quantity, we should see diminishing marginal returns in quality as reflective of the amount spent. Like, the improvement in hooker experience when we spend $5 more dollars in addition to the $70 already spent should be less than the amount of quality improvement we get in hookers in going from $65 to $70.

[Telamon]

You two amaze and delight me.

[EndWggn]

You know wheat, I'd say the hooker value must be pretty equal to the blow value. Else, they're a bad hooker.

[mehgamehn]

Okay, what if we put the money in a bank for a while, and then came back in like, a year, and then spent it on Hookers and Blow? I mean, sometimes, you just gotta put this stuff away for a while. I mean, in addition to the bank's interest, you probably will have also acquired some extra funds for this endeavor.

Of course, if we're dealing with banks, we could always just take out a loan. But are Hookers and Blow worth getting in debt over? Do we have a chart for that?

[Wheeeeeeatthins]

Before I start, utility=welfare. (Not sure if you knew that or not, since you explained to me what utility was). Some people use one term, some use the other.)

One hooker is a hell of a lot better than no hookers.

I am operating under the theory that one hooker is NOT going to be a "whole lot" better than no hookers. A discount hooker is probably going to smell bad, and be uglier and less versed in the art of causing orgasms than a normal hooker. This complies with the idea of "regular goods and inferior goods."
As hooker expenditures rise, you can spend for higher quality hookers. So instead of just getting more hookers as price goes up, you can get better hookers. Ones that know the five-point-boner-exploding tongue trick.
Conversely, as blow expenditures go up, you spring for better stuff, maybe fruit-flavored coke or some kind cut with more potent ingredients that will take you to a far-off dimension instead of cheap blow (in which dealers often dilute the blow content with inferior ingredients such as Lidocaine).

The bottom line is that the price constraint is just too constraining here. So I would move the utility curve over to the left more, to better represent just how constraining our budget:

This is what my final graph looked like.

Now, if hookers and blow were generic/commodity items that you will buy at any price level, or if we had $750 instead of $75, we could talk about the utility of using both. But when it is a choice of getting discount hookers and discount blow, or getting either decent blow or decent hooker services, one should buy quality.


Oh, and the best part of economics is that it is theory, so either one of us could be right!

Qwikedit: mehgamen--$75 dollars will not accrue much interest in a year. Also keep in mind that price level will rise in hand with inflation, so you are looking at real gains that amount to next to nothing.

[RedMage]

wait, are hookers and blow packaged together or separately?

[Shadow of the Lotus]

Before I start, utility=welfare. (Not sure if you knew that or not, since you explained to me what utility was). Some people use one term, some use the other.)

One hooker is a hell of a lot better than no hookers.

I am operating under the theory that one hooker is NOT going to be a "whole lot" better than no hookers. A discount hooker is probably going to smell bad, and be uglier and less versed in the art of causing orgasms than a normal hooker. This complies with the idea of "regular goods and inferior goods."

Whether a good is regular or inferior has nothing to do with the quality of one good reflective of price. Regular and inferior goods cover how the consumer reacts to a change in their personal income. A regular good being one in which a consumer would buy more of with an increase in their income and an inferior good being one in which a consumer would buy less of with an increase in income. Like, with an increase of income its more likely a person would consider spending more money at Olive Garden where as an increase in income will likely reduce the amount of spending they do at McDonalds or at the grocery store (as more of their money is going for regular goods).

As hooker expenditures rise, you can spend for higher quality hookers. So instead of just getting more hookers as price goes up, you can get better hookers. Ones that know the five-point-boner-exploding tongue trick.
Conversely, as blow expenditures go up, you spring for better stuff, maybe fruit-flavored coke or some kind cut with more potent ingredients that will take you to a far-off dimension instead of cheap blow (in which dealers often dilute the blow content with inferior ingredients such as Lidocaine).

The main thing as this point I want to address is this idea of quantity v. quality. One can represent the sum total of blow and hooker expenditures as either multiple hookers of a single quality or an increasing quality single hooker. I think it would be a fair point to discuss poor quality and good quality hookers as separate products, but its so unlikely that a person would split costs between the two that its better to look at it either as an increasing quality hooker or buying multiple hookers of similar quality. Regardless of either of the ones we choose to look at it as, we should experience diminishing marginal returns as we increase our purchase, either of quality of single hooker of quantity of fixed quality hooker.

The bottom line is that the price constraint is just too constraining here. So I would move the utility curve over to the left more, to better represent just how constraining our budget:

This is what my final graph looked like.

The problem here is that the budget constraint exists regardless of how you view the products and the utility curve (I remembered the right name for it now; indifference curve) isn't set at its maxamizing point. There are thousands of possible indifference curves out there, and the farther you are from the origin the greater your total utility. Take a point in the center of the indifference curve up there. You could reach a higher indifference curve by purchasing more of either hookers of blow and you are within your means to do so. The indifference curve could even be highly tilted towards one product of the other; it just doesn't make sense to have it tilted towards both since its a measurement of the marginal of one product reflective of the other. Its just impossible to have a small and large marginal reference at the same time.

Now, if hookers and blow were generic/commodity items that you will buy at any price level, or if we had $750 instead of $75, we could talk about the utility of using both. But when it is a choice of getting discount hookers and discount blow, or getting either decent blow or decent hooker services, one should buy quality.


Oh, and the best part of economics is that it is theory, so either one of us could be right!

Qwikedit: mehgamen--$75 dollars will not accrue much interest in a year. Also keep in mind that price level will rise in hand with inflation, so you are looking at real gains that amount to next to nothing.

The main part where I think you go off on is how you represent the utility gained from hookers and blow. Your curves assume an ever increasing utility, when it should have diminishing marginal utility. I'm not saying a higher quality hooker isn't better than a buck fitty hooker, just that the marginal effect of your money in purchasing hookers diminishes as you move up.

Edit: Forget the graph for now.

[Pinary]

It should be noted, however, that hookers and blow are typically sold in discrete units. While it is technically possible to get blow in arbitrary amounts, it is typically sold in pre-determined sizes. You don't go out and buy 0.3825 grams, you buy a dime bag. It's much easier for a dealer to just hand you a bag, take your money, and go than it is for him to carefully measure a custom amount, calculate how much it costs, and make change from your money.

Similarly, it is not typical, although slightly more feasible, to be able to purchase 38.25 minutes with a hooker- they're like cell phones. Even if you only talk on the phone for 45 seconds, you still used a full minute, and it's the same with hookers- they'll charge you for the full hour even if you only use 45 minutes.

Therefore, with accurate information, this situation can be described as a finite number of situations, each situation having a certain quantity of hookers and blow purchased and a definite utility value. With this model, we can determine the most logical choice.

Before this can be determined, though, there are a few more pieces of information needed. What are your local prices and availabilities for hookers and blow? Do local hookers charge by the hour, half-hour, or 15-minute intervals? What are the local prices for blow, and how much is actually in the various sizes, which also vary by region? And most importantly, what is the happiness formula for hookers and blow? Without knowing how much a given quantity of hookers and/or blow will make you happy, this will all have been a pointless exercise, and as the discussion so far as shown, having a general idea about it will do you no good- there are plenty of potential explanations in hookerandblowonomics 101, but they're all hypothetical. Without accurate, tested data, you may as well be running blind.

Because of the need for absolute data, you'll need to do some testing. You should find out what the local prices and quantities are, and test one unit of each quantity, recording how much it cost and how happy it made you. Any interactions between the two must also be tested, so you will need to test each potential combination, eventually filling in this chart:

 Blow \ Hookers | 0 units | 1 unit  | 2 units | ...
---------------------------------------------------
       0 units |         |         |         |
---------------------------------------------------
        1 unit |         |         |         |
---------------------------------------------------
       2 units |         |         |         |
---------------------------------------------------
           ... |         |         |         |

(Side note: Since you could also save some or all of the money, options with a total cost less than $75 must also be considered, and the happiness afforded to you by the remaining money should be factored in based on some constant factor. Let's say Legos- the amount of fun you can have with them compared to how much you pay is generally linear.)

Because of the necessity of accurate testing for decision-making, you will need enough money to make this whole venture possible. Perhaps this MYSTERIOUS AND ECCENTRIC RELATIVE will be willing to fund this venture? If asked why you need the money, remember why you are undergoing this exercise in the first place:

FOR SCIENCE!

(Thank you wikipedia for letting me sound like a druggie.)

[ThisCrab]

Dudes.
You can pay hookers WITH blow.

MATH THAT ONE UP HUH

[Wheeeeeeatthins]

The main part where I think you go off on is how you represent the utility gained from hookers and blow. Your curves assume an ever increasing utility, when it should have diminishing marginal utility. I'm not saying a higher quality hooker isn't better than a buck fitty hooker, just that the marginal effect of your money in purchasing hookers diminishes as you move up.

My curve does assume an ever-increasing utility. Or at least that's what the hookers call it.


No, but really, my curves show only part of a scale. (Is it economies of scale here? I forget if that's economies of scale or economies of return or something else.) There is diminishing returns for these goods; however since these are more expensive goods, the turning point is somewhere around 200-bucks. That's the point where you can't get much better.



Think of it in terms of pasta. 50 cents will buy you a cup o' ramen. $5 will buy you a basic spaghetti dinner at a cheap italian restaurant. (Think a fundraiser spaghetti dinner.) $10 will buy you a somewhat-above-average spaghetti dinner. (Think Olive Garden.) $15 will buy you a great spaghetti dinner. (Think a three-star restaurant.) $200 will buy you the best spaghetti dinner at the fanciest restaurant in the world, prepared by the best chef. Now, between each of these prices is a great, noticeable change in quality.
If you're only given $10, it doesn't matter that there's diminishing returns somewhere after the $15.


I will concede to many of the arguments you've made (after all I haven't been in an economics class in two years)...but you are not putting enough emphasis on quality: you're basing your models on perfectly generic goods. There are certain tiers of quality with these products. These are not widgets and gidgets. A bad dose of coke or a bad hooker can actually negatively affect utility.

Qwikedit: YES PINARY YES that is exactly what I am getting at in the paragraph above with the idea of tiers of quality. There are discrete units of each, and with the small amount of money that you have, it is better to go for a substantial experience of decent quality rather than just get "a taste of" each.

Edit: @ThisCrab: if you pay the hookers with blow, it gives you the same amount of utility as if you were to pay with the same amount of cash you used to buy blow. Unless you get off on just buying blow and collecting it, like some kind of scrooge mcjunkie.

[Shadow of the Lotus]

Yeah, I think in my first post I mentioned the idea that we were dealing with a constrained portion of the goods, so it was possible diminishing marginal returns wasn't in effect yet. Then I was stupid and forgot that part of the argument. It just struck me as so odd to see basically the inverse of a productions possibility curve in the first post, but really if we're at such a low point in the curve where DMR hasn't occured yet, we would get something funky like that. I mean, going back to the indifference curves, we'd actually be dealing with some inverted indifference curve until we hit DMR, which is just so funky that its never brought up. I think my main thing is I am overly optimistic about the quality of hooker I could get for $35. I think at this point the only clear thing is for the both of us is to go out in the field and see what we can find. Do you want to take blow or hookers? I'm thinking I'll try a combination of the two myself and just mix things up to see what works best.

[Wheeeeeeatthins]

Personally, my interest is peaked in blow after reading in the wikipedia entry that they make fruit-flavored coke.

[LeCrab]

I came into this thread expecting humorous suggestions but instead I found a deep and intricate economics seminar on the value of hookers and blow