Essay on Book Review: Common Sense Economics

1161 Words Aug 22nd, 2013 5 Pages
Oha1
Amanda Oha
PPOG 502
Dr. Stewart
Book Review: Common Sense Economics The book, Common Sense Economics written by James D. Gwartney, Ricahrd L.Stroup, Dwight R. Lee, and Tawni Ferrarini, gives a simple insight for reader into the inner workings economics in a common sense terms. The main point of the book is that to have economic success comes from low interference from the government, the motivation of individuals, and competitive markets. In the beginning of the book, the authors of the book started to breakdown this message of economics by explaining to the readers the twelve key elements of economics. 1. Incentives matters 2. There is no such thing as free lunch 3. Decisions are made at the margin 4.
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They explained that: “Changes in incentives influence human behavior in predictable ways”. The main point of this concept is that the more attractive an option is the more likely an individual to choose it. Another point that they also focused on was the fact that if a particular product more costly, the more unappealing it will become to the consumer. They used examples such as employees will worker harder if they feel that they will be greatly rewarded or a student will study material that they feel will be on an

Oha3 exam. This concept also can be correlated with political process as well. It is explained that citizens will vote for candidates will benefit them in their own personal lives. The second important concept was “There is no such thing as a free lunch”. This concept is built based upon human desire for good being unlimited and the limited resources to match that could not possible match those resources. This is relates to the theme of opportunity costs. This means that the choice of one thing, but you must sacrifice the opportunity to do another thing. There are opportunity costs with producers with the cost of outputting quality goods and adhering to regulations put on by the government.
The next concept is “Decisions are made at the margin” this meant that individuals wanted to get the most out their resources. You want to have most benefits out your actions. One thing that the authors put emphasis on is the fact that all
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