A poster had a picture of a homeless person squatting on the

A poster had a picture of a homeless person squatting on the side of a city road in the rain. Next to him was his dog who was sitting under an umbrella. So the dog was dry, but the homeless person was getting wet. Presumably the homeless person had nothing but his dog. The caption below the poster stated: \"the less you have, the more you value it.\"

a. Ignoring the picture what economic principle does the caption articulate. How could you articulate it better to remove any ambiguity?

b. Imagine the picture above the caption. Does it actually make sense with the caption? Explain.

Solution

a. The caption which states that \"the less you have the more you articulate it\", is a perfect example of economic principles of house holds. This cannot be applied to the entire country since a country should always have high inflow of money, enough money to fund people for their business. This caption will definitely suit the households. since this the lesser the amount of money each family has the more cautious will they be in saving and spending. But on the contrary an economy can be healthy only if there is increased spending. But here according to the caption, with the lesser amount of financial assets, people will try to invest it safely in a bank which might give them higher returns or higher interest rates. Yes, the caption is certainly ambiguous since economy would always promote individuals for increased spending but on the other hand the caption promotes the thought that individuals should have carefull and planned spending. Unless, untill an investment or expenditure is necessary they will not go for one.

b. Yes, the picture above the caption makes exact sense since the old man seems to have only a dog which he considers as his valuable asset. As people get older they tend to value relationships more than anything else. The dog should be his only companion that might help him. Hence the old man has preferred to make sure that the dog is dry even if he is getting wet. If he had had ten dogs then he would not be able to safeguard all instead he has only one dog by his side and which he wants it to be safe.