5 Basic Principles of Economics

Thinking Like an Economist

Tag: Data

  • Making Sense of Numbers: Practical Comparisons

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    Many people who want to study economics get confused about the scale of numbers. Understanding the scale of a number adds context and invites comparisons, which leads to the question “does it make a difference?”. Understanding scale may seem like a mathy thing, but it is really about communication. This post is motivated by a…

  • Retail Sales in Canada: Benchmarks

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    Statistics Canada recently announced that Canadians spent about $66,000,000,000 at retail stores in July. What does that mean? One of the challenges with studying economics is that people quote numbers even if the audience has trouble with the context. This lack of context is especially evident in media reports which shift between related-but-different measures (e.g.,…

  • Fast Food and Downward-Sloping Demand Curves

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    A pair of recent news articles concerning popular fast-food restaurants noted differences for different brands. First, McDonald’s restaurants are changing tactics because consumers (in the US especially) are feeling stressed by the economy. Second, even if the Canadian economy is also performing poorly, Restaurant Brands International Inc. (RBI, which oversees Tim Hortons, Burger King and…

  • 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…