There are difficult questions to answer: What is the weight-speed velocity of a swallow, anyway? Other questions are tricky, and the “obvious answer” may not be the right one. In this video, Prof. Antony Davies presents some of those tricky economics questions many of us answer incorrectly. For example, did World War II end the […]
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Dating can be tricky. With all this new technology, how can you pick the right person from the thousands of options? How can you stand out with so much competition? Luckily, economics has the answer. By learning about how people make decisions, you yourself can make better decisions and show potential dates that you’re a […]
Hunting for the vampire of your dreams can be a real pain in the neck. How do you find the right creature of the night? Don’t let your search for the love of your (un)life be in vein–Dr. Glen Whitman explores the economics of finding a partner and gives you the bloody truth about dating. […]
Is it crazy to think that making football helmets flimsy or getting rid of them altogether could reduce the amount of football concussions in the NFL? In this video, we discuss the moral hazard of football helmets. Moral hazard refers to the lessening of people’s incentive to avoid negative outcomes when they are presented with […]
What happens when the rules of a game change? One of the most important parts of playing a game like football is that the rules remain predictable and consistent for all players. However, this doesn’t just apply to touchdowns and tackles – the rule of law is crucial to a well-functioning free market. The question […]
What could the denizens of “Jersey Shore” possibly know about economics? In a word: plenty; at least according to Professor Dan D’Amico of Loyola University in New Orleans. Let Professor D’Amico show you how Mike “The Situation” Sorrentino and Nicole “Snooki” Polizzi display a keener grasp of basic fundamental economic concepts than you might think […]
How much does the average person know about economics? How about trade and immigration? Economists claim to know a great deal about these topics, and study them in depth. And while they often disagree with each other, most economists agree a lot more with each other than they do with the public. So why do […]
Presumably you’ve already made plans for surviving a zombie apocalypse. You have detailed escape routes, stockpiled weapons made for killing zombies, stores of food . . . or at least plans for these things. But have you thought through the important economic factors that might make the difference between surviving and losing your brain to […]
To understand ownership, it helps to understand something about surfing. Surfers employ a system of ownership over waves so that everyone gets a turn. Prof. Dan Russell describes a scenario in which three friends are surfing but none wants to be selfish. As a result, the good waves pass by and no one has a […]
Professor Art Carden is able to mow his yard, build a fence, and install a faucet all at the same time. How? He does this by specializing through trade. Rather than try to do those things himself—especially since he isn’t very good at doing them—he uses the money he earns doing what he specializes in […]
What can we learn about markets from a WWII POW camp? According to British economist R. A. Radford, POWs found that rather than give away unwanted rations to other POWs, “goodwill developed into trading as a more equitable means of maximizing individual satisfaction.” Professor Michael C. Munger explores what makes exchange more equitable than simply […]
(We hope you enjoyed our slightly-over-the-top April Fool’s release – LL) The truths governing economic order are hidden from ordinary men. Glimpses have been given to far-sighted dynamos. Nicolaus Copernicus wrote on both heliocentrism and the debasement of currency; Theodor Seuss Geisel wrote on both feline haberdashery and imperfect knowledge in the egg and ham […]
According to Prof. Michael Munger, prices (as in, the price of a carton of milk, or a new car) are akin to magic. Prices “magically” convert countless pieces of dispersed, complex information into a single signal that conveys to sellers what they should do to best benefit society. By ignoring the price system, you’re really […]
An “externality” occurs when a transaction between two people affects a third person without that person’s permission. Professor Michael Munger illustrates a simple externality problem with potato chips. If Art sells potato chips to Betty, Art and Betty are both better off. However, if Betty crunches her chips loudly enough that it annoys Carl, then […]
Architects create blueprints for buildings; could a person create a blueprint for society? Could such a person choose how many people will be lawyers and how many will be policemen? Adam Smith discusses such a designer in his book The Theory of Moral Sentiments (1759). He calls this person the “man of system,” saying that […]
Price gouging is usually defined as raising prices on certain kinds of goods to an unfair or excessively high level during an emergency. Although price gouging is illegal in 34 states, economics professor Matt Zwolinski asks whether price gouging should be illegal. He uses an example to examine the moral status of price gouging. The […]
Economists and philosophers use the word “value” differently. Philosophy professor Aeon J. Skoble points out that while economics discusses value as a subjective thing, philosophy tends to address value as objective. Rights, for example, are something everybody has to have. There’s no such thing as “human rights” unless every human has them. That’s as objective […]
According to Prof. Mark Pennington, externalities occur when private actors impose costs on other actors without paying appropriate compensation. Economists often use externality problems, such as pollution, to make arguments in favor of government action. However, these advocates of government action often overlook that fact that government action is itself a negative externality. Politicians’ decisions […]
It’s Valentine’s Day, and there’s nothing that Prof. Chris Coyne loves more than free markets. In fact, our ability to appreciate and enjoy Valentine’s Day is the direct result of the wealth created by markets. Before getting into the specifics, there are three economic principles that are illustrated by Valentine’s Day: The importance of free […]
Many believe that market economies create a dog eat dog environment full of human conflict and struggle. To Prof. Aeon Skoble, the competition in markets does not create conflict, but rather, encourages people to cooperate with one another for mutual benefit. For instance, suppose a thief steals a suit from Macy’s. If Macy’s knew who […]
Are the choices provided by a market economy stressful? According to Prof. Mark Pennington, it can definitely be stressful to choose among several different options. In fact, Pennington himself is often overwhelmed by the choices provided to him in a modern supermarket. This phenomena, called the paradox of choice, has often been used to make […]
Do stable property rights benefit only the rich? Prof. Aeon Skoble argues that, contrary to public belief, equally protected property rights are the little guy’s best protection against the rich and those with power. Put another way, property rights benefit all people regardless of wealth and power status.
How quickly could you sum up the principles of economics? While standing on one foot, Prof. Art Carden discusses the following economic principles in just over two minutes: Individuals strive to achieve their goals in the best ways possible. Every action has a cost. Incentives matter. Value is determined on the margin. Profits and losses […]