Intro
- If you can tell such stories and understand why they make sense, you have a far better grasp than simply memorizing. Same with narrative explanations based on principles of economics.
- the human brain's specialty seems to be absorbing information in narrative form.
- If your goal is for the core ideas to become part of your working knowledge, the only way that can happen is through engagement and repetition.
- Product design features are dictated by it (like rectangular milk cartons). Principle says an action should be taken if, and only if, its benefit is at least as great as its cost.
- "no cash on the table" principle - holds that freely available money seldom sits unclaimed for long. Only way to make real money will be through some combination of talent, thrift, hard work and luck.
- It reminds us to be wary of opportunities that seem too good to be true.
- Competition drives price to a common level. Law of one price - restatement of the no cash on the table principle.
- General pattern -- as price of a good keeps rising, the quantity demanded keeps falling.
- Supply side -- as price of good keeps rising, sellers are willing to sell more units.
- Many important patterns in the marketplace can be understood by focusing on sellers in some cases and on buyers in others.
- Hurdle method of differential pricing -- jump through hoops, then you pay less, ie. find out about sales, wait for sales, etc.
- Marginal cost - cost of producing one additional unit -- is less than average cost (total cost divided by number of units produced.)
- People enjoy property rights in chickens but not in whales explains why the former are secure and the latter are endangered.
- When all other attempts to explain rationale for a law fail, a good strategy is to ask how it might change income of those affected by it.
- "Costly to fake principle" -- costly or difficult to fake. Size (in dogs) is one such signal.
- Familiar conflict between individual and group incentives: Although it would be better for all to wait, the dominant strategy for each individual may be to snap up the first strong opportunity that comes along ... spouses in rural areas, free cherries ...
- Agreements to limit arms races -- not limited to formal athletic competition. ... mandatory kindergarten start dates, school uniform requirements, etc.
- theory of compensating wage differentials ... because jobs that entail moral compromise, inflexible work schedules, poor promotion prospects, and low employment security are generally viewed as less attractive, they must pay more to compensate for those attributes.
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