Ten Key Principles of Economics

1. Everything has a cost. There is no free lunch. There is always a trade-off.
2. Cost is what you give up to get something. In particular, opportunity cost is cost of the tradeoff.
3. One More. Rational people make decisions on the basis of the cost of one more unit (of consumption, of investment, of labor hour, etc.).
4. Incentives work. People respond to incentives.
5. Open for trade. Trade can make all parties better off.
6. Markets Rock! Usually, markets are the best way to allocate scarce resources between producers and consumers.
7. Intervention in free markets is sometimes needed. (But watch out for the law of unintended effects!)
8. Concentrate on productivity. A country’s standard of living depends on how productive its economy is.
9. Sloshing in money leads to higher prices. Inflation is caused by excessive money supply.!!
10. Caution: In the short run, falling prices may lead to unemployment, and rising employment may lead to inflation.



Showing posts with label Investing. Show all posts
Showing posts with label Investing. Show all posts

Friday, June 25, 2010

A Glimmer Of Hope In The I.P.O. Market

If you incorporate the stock market challenge into your curriculum, this article might interest you. It discusses the difficulties companies have faced in recent years taking their firms public. From the Internet bubble to frozen equity markets, it's been a tough decade for fledgling businesses seeking capital.
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