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    #1

    The resolution of that apparent paradox

    Hi
    Having a problem understanding one sentence. Could anyone help me understand that?

    Background information:

    In economics, a "Veblen good" is an item which people buy in greater quantity when the price goes up. According to the law of supply and demand, when the price of an ordinary item goes up, demand drops, i.e. people buy fewer of them. A Veblen good is a luxury item to which status is attached, such as a designer outfit or luxury car. As the price of such an item increases, its prestige increases, which makes the item that much more desirable. Therefore, as the price increases, the demand also increases, and more of these items are sold.

    In the argument, the two portions in boldface play which of the following roles?

    Answer:
    The first is a general rule, the violation of which seems to indicate a paradox; the second is the resolution of that apparent paradox.

    What does this part
    ' the resolution of that apparent paradox' mean ?

    Thanks


  1. Skrej's Avatar
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    #2

    Re: The resolution of that apparent paradox

    There is a conflict or paradox, between the general rule (the first boldface sentence) and this actual situation with Veblen goods.

    The second boldface sentence is the explanation of why there is a difference between the general rule and the actual situation.

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    #3

    Re: The resolution of that apparent paradox

    So resolution means explanation here?
    Quote Originally Posted by Skrej View Post
    There is a conflict or paradox, between the general rule (the first boldface sentence) and this actual situation with Veblen goods.

    The second boldface sentence is the explanation of why there is a difference between the general rule and the actual situation.

  2. Piscean's Avatar
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    #4

    Re: The resolution of that apparent paradox

    Quote Originally Posted by xuzheng View Post
    So resolution means explanation here?
    Yes, very roughly.

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