All Posts Tagged With: "opportunity cost"

The Family Stone: Cavemen, Trade, and Comparative Advantage

Imagine a Stone Age family: Papa Stone, Mama Stone, and their two little pebbles. Suppose that, as befits pre-women’s-lib Neanderthals, Papa Stone is initially more competent at every prehistoric survival skill: hunting, fishing, nut-and-berry gathering, firebuilding, tool-making. Despite his superior talents, it does not make sense for other family members to sit around waiting for him to [...]

30Nov2011 | Richard W. Fulmer | 1 comment | Continued

Taxation Is the Lifeblood of the State

The cliffhanger debate over whether or not to raise the federal government’s debt ceiling threw U.S. fiscal policy into brighter relief than it has been in recent memory. Suddenly people were calling for significant cuts in government spending in the face of a rapidly growing national debt. As often happens, calls for cuts in government [...]

26Oct2011 | Arthur E. Foulkes | 4 comments | Continued

Social Cooperation

At FEE’s Advanced Austrian Economics Seminar last summer, more than one speaker mentioned that Ludwig von Mises considered a different title for the book we know as Human Action. The other title? Social Cooperation. I’ve heard that story before, but this time it got me thinking: Would the free-market movement have been perceived differently by [...]

26Oct2011 | Sheldon Richman | 5 comments | Continued

But There ARE Free Lunches!

Creative discovery, what Israel Kirzner calls “entrepreneurship,” creates value where none existed before.

31May2011 | Sandy Ikeda | 0 comments | Continued

The Case for Big Government

Could it be that our already immense government is still too small? That’s what some people, including economic journalist Jeff Madrick, would have us believe. The first sentence of The Case for Big Government reads, “It is conventional wisdom in America today that high levels of taxes and government spending diminish America’s prosperity.” While this [...]

20May2010 | Robert Batemarco | 1 comment | Continued

The Fallacy in Lowering Healthcare Costs

No one understands or explains healthcare economics better than John Goodman, president of the National Center for Policy Analysis. His latest brings some badly needed clear thinking to the subject of cost. Read it here.A taste: …the only “cost” that really matters is “social cost.” That is the cost to all of us collectively. I [...]

11Nov2009 | Sheldon Richman | 0 comments | Continued

The True Price of a Hybrid

Prices are amazing. They are only little numbers, but they are so very useful. An economist will tell you that prices are the relative scarcities of items measured in monetary terms. The average businessman, if he ever really thinks about them, might say that they indicate which resources to use and which to avoid. Prices [...]

1Sep2007 | Paul Cwik | 5 comments | Continued

Economics for the Citizen Part II

There are four classes of behavior that can be called economic behavior: production, consumption, exchange, and specialization. Production is any behavior that creates utility, that is, raises the want-satisfying capacity of something. When a mill smelts iron ore, it raises the want-satisfying capacity of the material by changing its form. The metal’s want-satisfying capacity is [...]

1Sep2005 | Walter E. Williams | 1 comment | Continued

Rent-Seeking: A Primer

Readers of Ideas on Liberty often come across references to the term “rent-seeking.” Usually from the context it’s plain that it refers to something undesirable, but what exactly is it? The idea of rent is an old one in economics. In mainstream economics it refers to a payment to the owner of a fixed factor [...]

1Nov2003 | Sandy Ikeda | 5 comments | Continued

The Regulatory Conundrum

Doug Bandow, a nationally syndicated columnist, is a senior fellow at the Cato Institute and the author and editor of several books. When Robert Johnson, founder of Black Entertainment Television, wanted a $190,000 Ferrari 360 Spider, he went to a German dealer, since it would have taken two to three years to obtain one from [...]

1Jun2003 | Doug Bandow | 0 comments | Continued

Markets Aren’t Efficient?

In his August 22 Washington Post piece, “What’s New About This Economy?” Michael Kinsley summarizes the prevailing orthodoxy among economists: In the church of economic theory, as in that other church, the central symbol of the faith is a cross. Only this one is tilted and looks like an “x” not a “t.” As any [...]

1Dec2000 | Robert P. Murphy | 1 comment | Continued

Gottfried Haberler: A Centenary Appreciation

During the first week of July in 1936, an international conference on the “Problems of Economic Change” was held in Annecy, France. It brought together such notable economists as Ludwig von Mises, Wilhelm Röpke, Oskar Morgenstern, Bertil Ohlin, Lionel Robbins, Dennis Robertson, Charles Rist, William Rappard, John B. Condliffe, John Van Sickle, Alvin Hansen, John [...]

1Jul2000 | Richard M. Ebeling | 3 comments | Continued

In Defense of Grocery Coupons

Bill Field is a professor of economics at Nicholls State University in Thibodaux, Louisiana. We’ve all had this aggravating experience: rushing through the grocery store to finish our shopping, hurriedly looking for the shortest line, congratulating ourselves as we get in a line with only one lady in front of us, and then wanting to [...]

1Mar2000 | Bill Field | 1 comment | Continued

Hurricanes Are Creative Destruction?

My employer, Loyola College, is a Jesuit institution and, as such, encourages its students to participate in myriad community-service programs. In teaching introductory economics, I propose on the first day of class a marriage of economic education and community service. I offer to give students aluminum baseball bats with which they will walk through the [...]

1Feb2000 | Thomas J. DiLorenzo | 0 comments | Continued

Creating Jobs vs. Creating Wealth

Government policies are commonly evaluated in terms of how many jobs they create. Restricting imports is seen as a way to protect and create domestic jobs. Tax preferences and loopholes are commonly justified as ways of increasing employment in the favored activity. Presidents point with pride to the number of jobs created in the economy [...]

1Jan2000 | Dwight R. Lee | 16 comments | Continued

Comparative Advantage Continued

The concept of comparative advantage, which I began discussing last month, is a straightforward application of opportunity cost and is almost embarrassingly simple. Certainly people have no trouble understanding and recognizing the importance of this concept in their own personal lives.

1Nov1999 | Dwight R. Lee | 0 comments | Continued

Opportunity Cost and Hidden Inventions

Few people think about opportunity cost as systematically as economists do, but all of us are constantly guided by the opportunity costs we face. If, as you are reading this article, you learn that someone a few blocks away is giving $1,000 to anyone who comes by, I predict with confidence that you will quickly [...]

1Apr1999 | Dwight R. Lee | 1 comment | Continued
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