How does a shoe shopper decide what type of shoe to buy? How can that customer possibly make the best decision in the face of so many choices—within a reasonable amount of time? The consumer in today’s economy has an almost limitless variety of products to choose from. This abundance of variety creates a paradox of […]
Why do we make bad choices? Making rational choices is expensive. It takes time and energy to collect the information necessary for rational thought, and it takes mental effort to apply rational thinking to the information we gather. For that reason, we occasionally use a different type of decision making all together. Professor Antony Davies […]
Here’s why we we eventually stop searching for soulmates… and shoes. How is it possible to make a rational purchase decision without seeing all the possible options? Humans have evolved low cost shortcuts for increasing the odds of finding the better options. The shortcuts are called Heuristics. Professor Antony Davies of Duquesne University and Erika […]
The law of demand still applies even to overrated musicals.
How and why the economy works… in 3 minutes At some point in our distant past, a human who had food met another who had a spear. The two exchanged, and departed better off than when they met. Simple as it sounds, a highly evolved version of this concept is the reason we have planes, […]
Homo economicus got its start way back when two humans decided to trade. The rest was history.
Should we allow the wealthy to pass on large inheritances to their children and grandchildren? After all, allowing one generation to transfer large sums of money to another seems to exacerbate the problem of inequality, allowing second and third generations to bask in wealth they really didn’t earn. If we, at the very least, taxed […]
Editor’s note: This piece was originally posted by Freedom Partners on July 31st, 2016. Minor edits were made to improve clarity. What does socialism look like in the real world? Cronyism. Inequality. Poverty. Despair. Human suffering on an immense scale. That’s the answer that Freedom Partners member — and Venezuela native — Erick Brimen gives in the video below. […]
Senator Elizabeth Warren recently delivered a speech in Washington entitled “America’s Monopoly Problem,” and it could completely change the way we live our lives. That’s because if she is chosen by Hillary Clinton to be the Vice President and if Clinton defeats Trump, this could be a signal of what is to come with respect to antitrust activity […]
Why does economic education matter? Look no further than the ongoing crisis in Venezuela, where the Washington Post is reporting that food shortages are so bad that people are attacking food trucks when they make deliveries. It all started when Hugo Chavez and his successor, Nicolas Maduro, tried to formulate public policy while ignoring economics. […]
Editor’s note: This post originally appeared at Forbes. ESPN is reporting there’s outrage among some observers that people are scalping their “free” tickets to Ali’s memorial service in Louisville. Just as there is no such thing as a free lunch, there’s no such thing as a free ticket to a memorial service. ESPN quotes several […]
Hundreds of thousands of college students graduated last month, and for many, their biggest concern is how to pay off their college debt. Americans currently hold $1.3 trillion in student debt—even more than they hold in credit card debt—and its preventing them from making investments, buying homes, and successfully meeting their financial obligations. That’s a […]
The job market is in the dumps, especially for young people. Luckily, politicians have come to the rescue! Trump promises he’ll be “the greatest jobs president that God ever created.” And Bernie plans to spend $18B to get our economy back on track. But if government takes tax money from some businesses to create jobs […]
For the last few weeks, the D.C. metro system has been an even bigger mess than usual. That’s saying a lot. A quick flashback to one of my blog posts in January will give you a snapshot of how ridiculous the whole situation has gotten: A few months ago, Metro had us thinking it had […]
In the current debate about the minimum wage, some argue that higher minimum wages boost the economy overall. If workers receive higher wages, the reasoning goes, then they will have more money to spend, and their increased spending will boost business all around. In this news video, for example, an activist in the citizen action […]
You know, some Skittles would be really good about now. Lunch was over and I wanted something sweet, Skittles specifically, as I’ve rediscovered a taste for them during my daughter’s last few “go to work with dad” days. I grabbed a dollar and walked over to the bookstore. The Skittles rang up…$1.04. The last few […]
Editor’s Note: This is part 2 of an open letter from Prof. Howard Baetjer to a friend who commented on one of his Facebook posts about minimum wage laws. You can view part 1 here.Baetjer and his friend, Adam, look at the minimum wage issue from very different perspectives, so Baetjer wrote an open letter. […]
Editor’s Note: This is an open letter from Prof. Howard Baetjer to a friend who commented on one of his Facebook posts about minimum wage laws. Baetjer and his friend, Adam, look at the minimum wage issue from very different perspectives, so Baetjer wrote an open letter. What do you think about the issue? Check […]
Maybe you’ve heard this slogan: “we can’t get rich doing one another’s laundry.” It’s a sneer at low-skill jobs in the service sector and it is sometimes used to persuade governments to give special privileges to those who practice macho arts like manufacturing lest we be reduced to a nation of shopkeepers, or worse, dry […]
In a recent post at Cafe Hayek, Professor Donald Boudreaux answers the question, “Why not regard minimum wages as social experiments? If they succeed, great. If not, they can be undone.” There are a number of reasons Professor Boudreaux cites for why this isn’t a practical way to look at the minimum wage, including politician’s […]
What is capitalism? Why is it controversial? Dr. Jeffrey Miron from Harvard University breaks down 3 myths of capitalism.
Why don’t economists get invited to the good parties? Professor Sarah Skwire (Poet) thinks it has to do with economists’ choice of words. According to her, it seems, the optimal amount of economists to invite to an evening social would be close to zero. Economists probably aren’t known for the liveliness of their dinner conversations, but […]
What if there were no prices? How would you use available resources? To appreciate why market prices are essential to human well-being, consider what a fix we would be in without them. Suppose you were the commissar of railroads in the old Soviet Union. Markets and prices have been banished. You and your comrades. Passionate […]
Prices ensure your demands are supplied- even in times of scarcity. But who decides prices? Manufacturers and stores play a role, of course. As Professor Don Boudreaux explains, though, the biggest decider in determining prices is you, the consumer. Prices reflect the value consumers think the products are worth. Whether it’s the price of a […]