Comments on: Economics in One Page

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By: Keith

Keith — Mon, 20 Jun 2011 13:23:16 +0000

This is a terrific summary of the inherent wisdom and truth of classical economics. It would be
a different and far better world if intellectuals embraced these ideas instead of constantly trying to
overthrow them.

By: Economics in One Page 经济学的基本原理 « Data, Knowledge & Life

Economics in One Page 经济学的基本原理 « Data, Knowledge & Life — Sat, 19 Feb 2011 21:22:37 +0000

[...] 　　上面这句话是著名的经济、统计学者Milton Friedman的名言。虽然这句话里面包含的原则被人们广为接受，但是似乎没有什么人真正去尝试去用一页纸来概括经济学。Forecasts & Strategies的编辑Mark Skousen大约是一个愿意吃螃蟹的人。 [...]

By: Doug

Doug — Sun, 19 Dec 2010 03:42:27 +0000

I agree on all accounts but the price theory.

The price a buyer is willing to pay is subjective based on perceived value. Since the price it self can affect perceived value, it isn’t really accurate to say the cheaper the item the more it will sell. In certain circumstances more quantity will sell with a higher price, because the perceived value is higher.

Likewise seller’s are not concerned about a higher price, but a higher profit margin. If an item sells for $1 million, but only has 1 cent of profit built into the item there is not going to be much quantity on the market.

With that said, I’d adjust your #10 to:
10. Price theory: Prices are determined by the subjective valuations of buyers (demand) and sellers (supply), not by any objective cost of production; the higher the perceived value and the scarcer the item the more a buyer is willing to pay; the larger the profit margin the more quantity the seller is willing to supply.