Three contractors are bidding to fix a broken fence at the White House in D.C. -- one from New Jersey , another from Tennessee and the third, from Florida . They go with a White House official to examine the fence.

How it works: The Florida contractor, Jonathan, takes out a tape measure and does some measuring, then works some figures with a pencil. "Well", he says, "I figure the job will run about $900: $400 for materials, $400 for my crew and $100 profit for me."

Cletus, the Tennessee contractor also does some measuring and figuring, then says, "I can do the job for $700: $300 for materials, $300 for my crew and $100 profit for me.

Vito Pepitone from Jersey doesn't measure or figure, but leans over to the White House official and whispers, "$2,700". The official, incredulous, says, "You didn't even measure like the other guys! How did you come up with such a high figure?"

The New Jersey contractor whispers back, "$1000 for me, $1000 for you, and we hire the guy from Tennessee to fix the fence."

"Done!" replies the government official.

And that, my friends, is how it all works!