“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

Associate Professor of Economics, North Carolina State Univ.

Related Articles

5

America Is Now A Dependent Society–UPDATED

People don’t vote against their own interests. At least, that’s the theory. So, when their own interests involve keeping their

61

Obama Outrageously Claims ISIS Terrorists Have ‘Legitimate Grievances,’ Says Jobs Will End Islamic Extremism

On Wednesday an Op Ed appeared in the Los Angeles Times published under the name of Barack Obama in which

108

Dues Paid to Union Fat Cats Could Have Funded 265,447 Workers For A Year

Leftists and union supporters love to point to the salaries of corporate bosses and claim them an excess in order

comments

Share This

Share this post with your friends!