“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

0

Keeping the Faith

It’s over! At least, that’s what the liberal pundits are saying 24/7. Romney is lagging behind in key states and

8

UCLA Cans Professor James Enstrom for Thought Crimes

Under a hard tyranny, if professional intellectuals fail to toe the official line, they are imprisoned or killed. What happens

9

American Cancer Society Attacks Me by Name Over California Tax Grab?

Oddly enough, a coalition of big tax hikers in California, including the American Cancer Society, has attacked me by name