“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.

Craig Newmark

Craig Newmark

Associate Professor of Economics, North Carolina State Univ.

Related Articles

173

Obama To Philly And NY As Budget Battle Reigns

Remember this from Tuesday? President Barack Obama on Tuesday called on congressional leaders – especially Speaker John Boehner (R-Ohio) –

2

Hey, Ms. Scozzafava, How’s that “Stimulus” Working out for NY?

When I read that GOP leaders in upstate New York had tapped a state legislator who backed the Democrats’ spendthrift

1

Podcast: Meghan McCain, Jimmie Carter, Racism, ACORN, And Democrats Taxing The Poor

What isn’t going wrong in American and the world today? Download MP3 To subscribe on iTunes, just click here!