“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 on the Web
Craig Newmark

Craig Newmark

Associate Professor of Economics, North Carolina State Univ.

Related Articles

33

The Video President Obama Doesn’t Want You To See

The oil spill is a travesty beyond all imagination. It’s hard to get a grip on how awful this all

10

Obama Puts Unions Ahead of a Healthy Economy, Free Trade

President Obama claims that he wants to “create jobs,” and is happily touting several policies that he claims will create

8

Michael Moore Caught Stealing Others’ Work

Filmmaker Michael Moore, famed for his propagandistic left-slanted portrayals of America in such films as Roger and Me, Bowling for