Economic Essentials and Economic Errors

InterMedia Press

Many introductory economics books start by listing some main ideas. For every Essential idea in economics, there is a corresponding Error. Here they are.

  1. Economics is about choosing. Resources are scarce, they have different uses, and we have to choose among those alternative uses. What we call “economics” is ultimately people’s choices and their unintended consequences. The unintended consequences can be positive or negative. Even though you only intend to do a kind deed for a friend when you treat him to a slushie at a gas station, you still help far-off shareholders provide for their retirement security. Even though you intend to help people in dire circumstances by prosecuting “price gougers” who raise prices after a natural disaster, you make people worse off by causing shortages. Economics is involved whenever people choose, and the prosperity people enjoy today is an unintended consequence of letting people make their own…

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