5 Basic Principles of Economics

Thinking Like an Economist

Tag: Gains from Trade

  • Trick or Treat: Lessons in Economics

    Trick or Treat: Lessons in Economics

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    Halloween is an odd event because it is so silly: people dress up in scary costumes and, for one night in the year, anybody who knocks on the door is given candy. This post notes six lessons involving economics, not including the incentive/threat implied by the phrase “Trick or Treat”.

  • Surprising Insights and the 2025 Nobel Laureates in Economics

    Surprising Insights and the 2025 Nobel Laureates in Economics

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    The 2025 Nobel Laureates in Economic Science are being recognized for their contributions to understanding the determinants of economic growth. Growth is generally seen as a good thing and the work being recognized was done more than 30 years ago. So, what was the surprising insight and, more importantly, what do others not understand about…

  • Economic Lessons Hidden in Popular Movies

    Economic Lessons Hidden in Popular Movies

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    The Oscars® are handed out on March 2, and, in many Canadian provinces, Spring Break for high school students is soon after. So, now is a good time to remember that some movies present important economic ideas entertainingly. Most movies do a bad job of conveying economic ideas precisely.

  • What are the Effects of Tariffs on a Nation’s Wealth?

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    This old question has been given new life by the inauguration of Donald Trump as President of the United States of America. Using tariffs to “fix” a trade deficit is seductively appealing but, like other zombie ideas, it relies on a misunderstanding. In this case, it ignores two basic principles of economics: opportunity cost and…

  • 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…