“The 10 Things In Economics That Everybody Should Know”


This: list: gets about 2.5 out of 10 correct. A better list:

1. People want far more at zero prices than they can possibly produce: goods and services have been, are, and almost surely always will be scarce.

2. People respond to incentives.

3. The cost of doing something is the value of the next best alternative foregone. (On the list.)

4 Sunk costs are sunk. (Or, sunk costs should be ignored in making decisions.)

5. Voluntary trade is mutually beneficial. (On the list.)

6. Market s are least-cost allocatiion mechanisms.

7. Future cash flows are worth less than nomimally equivalent current cash.

8. Inflation is, everywhere and always, caused by excessively high money growth.

Also see...

Craig Newmark

Craig Newmark

Associate Professor of Economics, North Carolina State Univ.

Related Articles

66

What Most People, Including Ben Stein, Are Missing About Raising Tax Rates

Ben Stein is a smart guy and I usually agree with him, but I very respectfully would like to note

26

White House: Social Security Should Be Off Limits In “Fiscal Cliff” Talks, But Won’t Show Their Plan

Other than raising taxes and gutting the military, is there anything Team Obama is willing to discuss? They’ve already shrieked

20

Credit Card ‘Reform’ Will Force All Credit Purchases to Exceed $10

Previous to the current meddling by Congress, stores were technically not allowed to require a minimum purchase for credit cards.