5 Basic Principles of Economics

Thinking Like an Economist

Tag: High School Economics

  • 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.,…

  • Predicting an Election (Stock Market)

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    On Tuesday night, two US politicians will talk and then some media experts will talk about what the politicians talked about. Polls suggest that the country is nearly split 50/50 about which politician is preferred. For media companies, that is great news: they can say “Stay tuned for the latest news on this small but…

  • 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 Margins Principle

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    Economics is about behaviour and behaviour is about decisions. The margins principle is a reminder that most decisions involve concern small variations in a margin of adjustment. This idea is probably the second big lesson taught to students in their first economics course. In classes, this principle is seen in jargon such as “marginal utility”,…

  • The Equilibrium Principle

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    The only relevant behaviours by members of a group of participants are those which are compatible with one another. Behaviours that are not compatible with the behaviours of others (e.g., with competitors and with the other side of the market) are not sustainable, regardless of the intentions of any one individual. Most people are familiar…

  • The Gains from Trade Principle

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    Most economic activities involving more than one person are not “zero-sum games”. They involve trading of some kind. Production without consumption is a waste and consumption without production is impossible. This perspective is not isolated to economics. Marketers encourage firms to adopt a “marketing orientation”, in which a firm seeks a profitable strategy which creates…