My friends from childhood, and even my brother, would say that I’m “stingy“. However, an Indian girl from Delhi I met some weeks ago, told me that I have “splurging tendencies”. It is, indeed, very confusing. What’s happening?

I realized I’m suffering from Money Illusion, which is when decisions are influenced by nominal amounts of money. [...]

Economic theory suggests than in perfect competition, firms are “price-takers”, which means that they cannot – at least in the long run – set prices, but they rely on the prices set at the market (according to supply and demand of each good). So given the prices, the firms decide on the quantity they should [...]