5 Basic Principles of Economics

Thinking Like an Economist

Tag: Comparative Statics

  • Economic Impact of a Dragon Year: Luck vs. Reality

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    The Year of Dragon is believed to auspicious and lucky in Chinese culture. Research has found that more than the usual number of babies are born in China during Dragon Years, and that there are more marriages than usual. Then what? To recognize the end of the Year of the Dragon and the start of…

  • Unexpected Economic Insights During Christmas

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    Christmas is an enjoyable time for many, including many non-Christians living in countries where Christians are a minority. It is a time for presents and food and thinking of others. This post identifies some unexpected ways that the five basic principles of economics appear during this time. Familiar attempts to apply economic ideas to Christmas…

  • Market Control: How Barriers Impact Prices

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    Some economic discussions start by assuming that the market in question is perfectly (or almost perfectly) competitive. Other discussions start by assuming that a firm is mostly monopolistic. Understanding the difference matters, for several reasons. There are examples of monopolists and of cartel agreements [1] [2] [3]. Other investigations are on-going while politicians ask for…

  • Swiftonomics: Economic Ideas and Taylor Swift

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    Taylor Swift is accused of causing inflation. She also represents an innovative organization worth more than US$1,000,000,000. Beyond this high-level perspective on her impact, many teachers are using her career to demonstrate old economic ideas more memorably. Some instructors offer entire courses in university [1] [2] [3] [4] [5] and at the high school level.…

  • The Comparative Statics Principle

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    Comparative statics analysis is invoked in statements about the effects of differences or when linking cause and effect or when comparing a situation “before” with a situation “after”. Good comparative statics starts by clarifying which variables are “exogenous” (e.g., consumer tastes, production technology and so on) and which variables are “endogenous” (often price or quantity…