Saturday, January 30, 2010

Acrostic ECONOMICS!!

Good work by Gordon Boronow, Assistant Professor, Nyack College
(HT: Greg Mankiw)

Ten Key Principles in Economics

Everything has a cost. There is no free lunch. There is always a trade-off.

Cost is what you give up to get something. In particular, opportunity cost is cost of the tradeoff.

One More. Rational people make decisions on the basis of the cost of one more unit (of consumption, of investment, of labor hour, etc.).

iNcentives work. People respond to incentives.

Open for trade. Trade can make all parties better off.

Markets Rock! Usually, markets are the best way to allocate scarce resources between producers and consumers.

Intervention in free markets is sometimes needed. (But watch out for the law of unintended effects!)

Concentrate on productivity. A country’s standard of living depends on how productive its economy is.

Sloshing in money leads to higher prices. Inflation is caused by excessive money supply.

!! Caution: In the short run, falling prices may lead to unemployment, and rising employment may lead to inflation.

Friday, January 29, 2010

Fighting corruption in India

Personally, i'm sceptical that schemes like these would work in fighting corruption but a honest attempt nonetheless. Corruption exists because of a lack of sufficient transparency and accountability, hence in order to get rid of petty corruption we'd have to figure out how to revise the incentives.

Saturday, January 23, 2010

3rd grade economics quiz

this would have been difficult for some MBA grads i know :)
and i particularly love the fact that the kid believes 'air-conditioning' is a Need