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What I learned in Mr. Davis’ Microeconomics Class.
No matter how long you live, you will live in a world of scarcity.
As the price of a product goes up, people buy less.
As the price of a product goes down, people buy more.
A price change will result in the change of quantity demanded or supplied of a good.
When a determinant changes, this will shift the total demand or supply of a product.
The answer to 90% of economic questions is supply & demand.
If demand goes up or supply goes down, prices will go up.
If demand goes down or supply goes up, prices will go down.
If the imposes price controls above or below the equilibrium price, the result will be shortages or surpluses.
The fewer substitutes there are for a product, the more you are going to pay.
The price you are willing to pay for a product is based on the additional satisfaction you will receive from consuming the next unit, not the total satisfaction you receive from all your product consumption.
The owner of a resource tends to be more careful and efficient with it than a non-owner.
There will always be a shirker in any group.
The #1 goal of a business is profit maximization. If there is not a profit, there is nothing else.
If you want to make a high income in a market economy, learn how to create economic value.
Market economies result in the unequal distribution of income. Through the incentive of keeping one's profits (the residual claimant), a market economy is also the reason you have the music you like to listen to, I-phones, and cars.
If you give something away free of charge, people will overconsume it, resulting in shortages and eventually no product at all.
NOTHING in this world is free! There is a cost to everything.
Individuals move with purpose toward their desired goals.
No one will ever know what is best for you, better than you.
Suppose someone is making a good or service and earning an economic profit, and there are minimal barriers to entry. In that case, other people will attempt to make a similar product, therefore, eliminating the economic profit. "A good thing last two years," Harry Veryser.
There is a difference between monopoly power given by the government and one earned through competition. Monopoly power through government promotes inefficiencies and higher prices. Monopoly power gained from competition comes from creating more value for consumers, usually complemented with lower market prices.
Patents and copyrights protect creative people giving them the incentive to produce newer labor-saving devices, medications that fight illness and disease, create music audiences enjoy listening to, and watchable entertainment like Mickey Mouse.
People pay politicians to limit competition so they can charge higher prices (car inspections).
The difference between wealth and income is that income is how much you make in a given period. Wealth is how much you own. Your goal is to become wealthy.
One becomes wealthy by saving and investing over time, not consuming.No one themselves to a comfortable retirement or a house.
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What I learned in Mr. Davis’ Macroeconomics Class.
No matter how long you live, you will live in a world of scarcity.
The answer to 90% of economic questions is supply & demand.
An entrepreneur is the same as an artist or musician. Entrepreneurs take materials and create something of value (hopefully).
Profits tell people they are doing something right.
Losses tell people they are doing something wrong.
Profit and losses carry the same importance in a market economy.
A rational person will always respond to incentives and follow self-interest.
There is a cost to everything; nothing is free.
Prices increasing and decreasing in a market economy tells resource owners where resources are most needed. If prices go up resources are needed. If prices go down resources are not.
Education is based on positive statements, not normative statements. You are paying for the facts, not some instructor’s opinion.
People respond to incentives
No one makes a trade thinking they will be worse off.
Tariffs result in lower quality products at a higher price.
Countries that trade with each other do not go to war against each other.
Inflation starts with an increase in the money supply, resulting in increased prices.
Saving and investing in capital grows an economy.
Job destruction is necessary for economic growth.
For every boom in the economy, there will be a bust. Keep an eye on the yield curve.
Save your money during the boom times, so you can take advantage of prices during the bust.
For every government project, the private industry has to give up one of theirs.
Government produces nothing without taking from the private sector first.
Higher taxes does not guarantee higher tax revenue.
Goods and services are what make money valuable.
It is easier for the government to increase the money supply than it is to increase taxes.
The more debt you have, the less money you have to save and invest.
There is a difference between wealth and income. Income is how much you make in a given period. Wealth is how much you own. Your goal is to become wealthy.
One becomes wealthy by saving and investing, not consuming. No one consumes themselves to a comfortable retirement or a house.