“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.

Trending Today
Craig Newmark

Craig Newmark

Associate Professor of Economics, North Carolina State Univ.

Related Articles

4

How Did Your Representatives Vote on Cost Cutting (HR1)?

Last week, the House of Representatives passed HR 1. This bill was the 2011 continuing appropriations act, the bill that

10

Government Is Not Our Friend

Small-government conservatives have always been suspicious of government. Whether city, county, state or federal all government is looked on as

8

Good News: Obama’s Not Calm About Horrible Economy

No, really Obama: It’s ‘nonsense’ I’m calm about state of economy In an exclusive interview with TODAY’s Ann Curry that