Most Important Economic Concepts
The Club for Growth points out that three economists have picked out what they view as the most important economic concepts:
1. Comparative advantage and the gains from trade 2. Supply, demand, and the efficiency of market equilibrium 3. Market failure, such as externalities, and the role for government
1. Comparative advantage 2. The role of incentives and opportunity costs 3. How markets spontaneously coordinate individual behavior and improve the human condition.
1. People tend to respond to incentives. 2. Scarcity, and its important corollary, opportunity cost. 3. Markets tend to be low cost allocators of goods and services
My three, FWIW:
1. Goods are scarce, and the opportunity cost that goes along with using them
2. Freely agreed upon trades are, by definition, mutually beneficial
3. Incentives matter