Modern Principles of Economics
For example, why does water, which is essential for life, cost nothing, while diamonds, which are mere ornaments, are highly valued? The resolution to this problem turned out to be in the effects of scarcity: goods whose supply is low relative to demand will command a higher price than goods whose supply is abundant relative to demand.
Philip Auerswald • The Coming Prosperity: How Entrepreneurs Are Transforming the Global Economy
Have you ever wondered why so many developing economies—the successful ones, I mean—rise to prosperity through exports and tradable goods? There are a few reasons for this, but one is that the external world market provides a real measure of value. If you are exporting successfully, it’s not based on privilege, connections, corruption, or fakery. S
... See moreTyler Cowen • The Great Stagnation: How America Ate All The Low-Hanging Fruit of Modern History, Got Sick, and Will (Eventually) Feel Better: A Penguin eSpecial from Dutton
Each price contains a vast amount of information. The price of a gallon of gasoline, for example, incorporates everything from the weather in a far-off port to the stability of a foreign government. It tracks refinery availability in the Gulf of Mexico and emissions regulations in California, while simultaneously taking into account the increased d
... See moreJessica C. Flack • Worlds Hidden in Plain Sight: The Evolving Idea of Complexity at the Santa Fe Institute, 1984–2019 (Compass)
This may be the nirvana of capitalism – increased marginal customer utility. Imagine the customer finding more value with each incremental use. Some may suggest that this concept already exists in the form of volume discounts. However, this offers a vendor no real competitive advantage, as all of its competitors are likely to offer the same discoun... See more