Common Sense Economics Part 1: Twelve Key Elements of … · 2017. 10. 18. · Common Sense Economics Part 1: Twelve Key Elements of Economics By: Institute for Humane Studies

Common Sense Economics Part 1: TwelveKey Elements of Economics

By:Institute for Humane Studies

Common Sense Economics Part 1: TwelveKey Elements of Economics

By:Institute for Humane Studies

Online:< http://cnx.org/content/col12213/1.1/ >

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Table of Contents

1 Incentives Matter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 There Is No Such Thing As A Free Lunch . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53 Decisions Are Made At The Margin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94 Trade Promotes Economic Progress . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115 Prices Bring The Choices Of Buyers And Sellers Into Balance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 156 Transaction Costs Are An Obstacle To Trade . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 197 Pro�ts Direct Businesses To Increase The Value Of Resources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 238 People Earn Income By Helping Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 279 Production Of Goods And Services People Value Raises Living Standards . . . . . . . . . . . . . . . . . . 2910 Economic Progress Comes Through Trade, Investment, and Sound Eco-

nomic Institutions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3311 Market Prices Direct Buyers And Sellers Toward The General Welfare . . . . . . . . . . . . . . . . . . 3712 Secondary E�ects Are Often Ignored . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4113 Discussion Questions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46Attributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47

iv

Available for free at Connexions <http://cnx.org/content/col12213/1.1>

Chapter 1

Incentives Matter1

1.1 Element of Economics

Incentives matter. Changes in bene�ts and costs will in�uence choices in a predictable manner.

1.2 Video

This media object is a video �le. Please view or download it at<Incentives Matter.mp4>

Figure 1.1: "Do Incentives Matter for the Economy?" by the Institute for Humane Studies

Watch on YouTubehttps://www.youtube.com/watch?v=ML3Ai7XIPfk2

1.3 Exercises

Exercise 1.1 (Solution on p. 3.)

The basic postulate of economics indicates that changes in incentives in�uence the

a: actions of producers but not consumers.b: actions of consumers but not producers.c: choices of individuals only when they buy and sell goods in the marketplace.d: choices of individuals with regard to a wide range of activities, including those generally

perceived as social or political.


When government mandates that manufacturers of automobiles are to increase fuele�ciency, the incentives matter postulate of economics indicates that

a: consumers will positively adjust their driving habits, eventually increasing time on the roadand carbon emissions.

1This content is available online at <http://cnx.org/content/m64504/1.4/>.2https://www.youtube.com/watch?v=ML3Ai7XIPfk


1

2 CHAPTER 1. INCENTIVES MATTER

b: there will be an increase in the supply of high gas-consumption vehicles, especially SpecialUtility Vehicle's (SUVs).

c: consumers will fail to adjust their driving habits, placing upward pressure on the price of gas.d: fewer trips to the pump will boost tax revenues collected by the owners of gas stations which

are slotted to cover repairs and maintenance.


3

Solutions to Exercises in Chapter 1

Solution to Exercise 1.1 (p. 1)d: choices of individuals with regard to a wide range of activities, including those generally perceived associal or political.Solution to Exercise 1.2 (p. 1)a: consumers will positively adjust their driving habits, eventually increasing time on the road and carbonemissions.


4 CHAPTER 1. INCENTIVES MATTER


Chapter 2

There Is No Such Thing As A Free

Lunch1


There is no such thing as a free lunch; goods are scarce and therefore we have to make choices.

2.2 Video

This media object is a video �le. Please view or download it at<Opportunity Cost.mp4>

Figure 2.1: "Opportunity Cost" by the Institute for Humane Studies

Watch on YouTubehttps://www.youtube.com/watch?v=9QfLr6V1TO82

2.3 Exercises


Which of the following students would be most likely to drop out of college beforecompleting their undergraduate degree?

a: a senior physics major with a solid B averageb: a junior majoring in secondary education who has discovered that the Bureau of Labor Statis-

tics projects that there is strong growth in job opportunities for teachersc: an outstanding baseball player in his junior year that just received a $500,000 o�er from a

professional teamd: a junior economics major who wants to attend law school.

1This content is available online at <http://cnx.org/content/m64520/1.3/>.2https://www.youtube.com/watch?v=9QfLr6V1TO8


5

6 CHAPTER 2. THERE IS NO SUCH THING AS A FREE LUNCH


Susan is trying to decide whether to quit her $20,000 per year job so she can returnto college next year as a full time student. If she goes to college next year, her booksand supplies will cost $500, tuition will cost $9,000, and her other expenses (trans-portation, housing, and food) will increase by $2,000. What is Susan's opportunitycost of attending college next year?

a: $31,500b: $11,500c: $9,000d: $2,500


7


Solution to Exercise 2.1 (p. 5)c: an outstanding baseball player in his junior year that just received a $500,000 o�er from a professionalteamSolution to Exercise 2.2 (p. 6)a: $31,500


8 CHAPTER 2. THERE IS NO SUCH THING AS A FREE LUNCH


Chapter 3

Decisions Are Made At The Margin1


Decisions are made at the margin: If we want to get the most out of our resources, optionsshould be chosen only when the marginal bene�ts exceed the marginal cost.

3.2 Video

Figure 3.1: "Thinking at the Margin" by the Institute for Humane Studies

Watch on YouTubehttps://www.youtube.com/watch?v=tMhdTn-5fu82

3.3 Exercises


Why are diamonds more expensive than water?

a: People value diamonds more than waterb: It takes more capital investment to extract water than diamondsc: There are price �oors on water, but not on diamondsd: The marginal utility of water decreases faster than the marginal utility of diamonds


According to economic reasoning, you should follow Nike's advice and �Just Do It�when

a: the total bene�ts are less than the total costs.b: the additional costs are greater than the additional bene�ts.c: the additional costs are the same as the additional bene�ts.d: the additional bene�ts are greater than the additional costs.

1This content is available online at <http://cnx.org/content/m64489/1.6/>.2https://www.youtube.com/watch?v=tMhdTn-5fu8


9

10 CHAPTER 3. DECISIONS ARE MADE AT THE MARGIN


Solution to Exercise 3.1 (p. 9)d: The marginal utility of water decreases faster than the marginal utility of diamondsSolution to Exercise 3.2 (p. 9)d: the additional bene�ts are greater than the additional costs.


Chapter 4

Trade Promotes Economic Progress1


Trade promotes economic progress.

4.2 Video

This media object is a video �le. Please view or download it at<Foreigners Are Our Friends.mp4>

Figure 4.1: "Econ Chronicles: Foreigners Are Our Friends" by the Institute for Humane Studies

Watch on YouTubehttps://www.youtube.com/watch?v=uXMnAPGY1uE2

4.3 Exercises


Free trade helps our economy in which of the following ways?

a: One country gains at the expense of anotherb: Relatively high cost goods, services and resources are importedc: Trading partners both bene�t, raising the standard of living in each countryd: Domestic production and employment shrink and prices rise.


Who gains in a voluntary international trade?

a: Only the exporter

1This content is available online at <http://cnx.org/content/m64522/1.3/>.2https://www.youtube.com/watch?v=uXMnAPGY1uE


11

12 CHAPTER 4. TRADE PROMOTES ECONOMIC PROGRESS

b: Only the importerc: Both the exporter and importerd: Both the exporter and importer, especially the exporter


13


Solution to Exercise 4.1 (p. 11)c: Trading partners both bene�t, raising the standard of living in each country.Solution to Exercise 4.2 (p. 11)c: Both the exporter and importer


14 CHAPTER 4. TRADE PROMOTES ECONOMIC PROGRESS


Chapter 5

Prices Bring The Choices Of Buyers And

Sellers Into Balance1


Prices bring the choices of buyers and sellers into balance.

5.2 Video

This media object is a video �le. Please view or download it at<What Do Prices Know.mp4>

Figure 5.1: "What Do Prices Know That You Don't?"

Watch on YouTubehttps://www.youtube.com/watch?v=WPy-QKXofQs2

5.3 Exercises


How was Moe Cashferme able to determine which crop was most demanded by society?By:

a: researching what crops are best for societyb: paying attention to the crop in which consumers paid the highest pricec: consulting with friends and family membersd: making a lucky guess


When individuals are directed by prices determined in competitive markets, theiractions will tend to promote the productive use of resources:

1This content is available online at <http://cnx.org/content/m64511/1.4/>.2https://www.youtube.com/watch?v=WPy-QKXofQs


15

16CHAPTER 5. PRICES BRING THE CHOICES OF BUYERS AND SELLERS

INTO BALANCE

a: only if buyers and sellers personally care about economic e�ciencyb: even when each market participant cares only about their own self-interest rather than the

overall e�ciency of resource usec: even if business �rms fail to produce goods e�cientlyd: if, and only if, businesses recognize their social obligation to keep costs low and use resources

wisely


17


Solution to Exercise 5.1 (p. 15)c: consulting with friends and family membersSolution to Exercise 5.2 (p. 15)b: even when each market participant cares only about their own self-interest rather than the overalle�ciency of resource use.


18CHAPTER 5. PRICES BRING THE CHOICES OF BUYERS AND SELLERS

INTO BALANCE


Chapter 6

Transaction Costs Are An Obstacle To

Trade1


Transaction costs are an obstacle to trade.

6.2 Video

This media object is a video �le. Please view or download it at<Protectionism.mp4>

Figure 6.1: "Free Trade vs. Protectionism" by the Institute for Humane Studies

Watch on YouTubehttps://www.youtube.com/watch?v=7njIlZ2xYq02

6.3 Exercises


Which statement can be supported by research and data regarding protectionism?

a: The primary tool of protectionism is the sales tax on goods and services in the United Statesb: Protectionism favors the production of foreign goods and services over domestic outputsc: The cost of tari�s is passed onto consumers in the form of higher pricesd: Protectionism fueled economic growth in Hong Kong and the United States.


Which of the following statements re�ect sound economic reasoning?

1This content is available online at <http://cnx.org/content/m64523/1.3/>.2https://www.youtube.com/watch?v=7njIlZ2xYq0


19

20 CHAPTER 6. TRANSACTION COSTS ARE AN OBSTACLE TO TRADE

a: Foreign competition will reduce the wealth of Americansb: If it is more economical to acquire a good through trade than by self-production, it makes

sense to trade for itc: If domestic production of a good will employ lots of people, the good should be produced

domesticallyd: Higher tari�s will increase the total volume of international trade.


21


Solution to Exercise 6.1 (p. 19)c: The cost of tari�s is passed onto consumers in the form of higher prices.Solution to Exercise 6.2 (p. 19)b: If it is more economical to acquire a good through trade than by self-production, it makes sense to tradefor it.


22 CHAPTER 6. TRANSACTION COSTS ARE AN OBSTACLE TO TRADE


Chapter 7

Pro�ts Direct Businesses To Increase

The Value Of Resources1


Pro�ts direct businesses toward productive activities that increase the value of resources, whilelosses direct them away from wasteful activities that reduce resource value.

7.2 Video

This media object is a video �le. Please view or download it at<Pro�ts.mp4>

Figure 7.1: "The Price System, Part 2: Pro�ts and Losses" by the Institute for Humane Studies

Watch on YouTubehttps://www.youtube.com/watch?v=YPDUMEQAIL02

7.3 Exercises


How does a business earn a pro�t? By:

a: producing e�ciently and keeping their costs lowb: producing goods and services that consumers value highly relative to costsc: discovering and developing better products and lower-cost production methodsd: engaging in all of the above.

1This content is available online at <http://cnx.org/content/m64515/1.4/>.2https://www.youtube.com/watch?v=YPDUMEQAIL0


23

24CHAPTER 7. PROFITS DIRECT BUSINESSES TO INCREASE THE VALUE

OF RESOURCES


When resources are allocated by markets, pro�ts and losses provide information about:

a: which resources are being used productively and which resources should be allocated to otheruses

b: which products are priced too high and which are priced too lowc: which industries need to be subsidized and which need to be subject to additional regulationd: which businesses should be taxed more heavily and which should be subsidized.


25


Solution to Exercise 7.1 (p. 23)d: engaging in all of the above.Solution to Exercise 7.2 (p. 24)a: which resources are being used productively and which resources should be allocated to other uses.


26CHAPTER 7. PROFITS DIRECT BUSINESSES TO INCREASE THE VALUE

OF RESOURCES


Chapter 8

People Earn Income By Helping Others1


People earn income by helping others.

8.2 Video

This media object is a video �le. Please view or download it at<Entrepreneurs.mp4>

Figure 8.1: "Are Entrepreneurs Modern Day Heroes?" by the Institute for Humane Studies

Watch on YouTubehttps://www.youtube.com/watch?v=ChEImWVj_kY2

8.3 Exercises


How do entrepreneurs help individuals across income-levels, races, genders, religions,and more? They:

a: Create new goods and servicesb: Lower prices and increase the availability of goods and servicesc: Fuel economic growth and prosperityd: Do all of the above

1This content is available online at <http://cnx.org/content/m64508/1.4/>.2https://www.youtube.com/watch?v=ChEImWVj_kY


27

28 CHAPTER 8. PEOPLE EARN INCOME BY HELPING OTHERS


Solution to Exercise 8.1 (p. 27)d: Do all of the above


Chapter 9

Production Of Goods And Services

People Value Raises Living Standards1


Production of goods and services people value, not just jobs, provides the source of high livingstandards.

9.2 Video

This media object is a video �le. Please view or download it at<Make Progress.mp4>

Figure 9.1: "Econ Chronicles: Make Progress, Not Work" by the Institute for Humane Studies

Watch on YouTubehttps://www.youtube.com/watch?v=fEbdgpIQ7n42

9.3 Exercises


Which of the following is true about economic progress?

a: New technologies often disrupt existing jobs and cause unemployment in the short termb: It is very di�cult to predict the new ideas and jobs that will come about from economic

progressc: Economic progress is the best social insurance against disastersd: All of the above


Economic progress:

1This content is available online at <http://cnx.org/content/m64512/1.4/>.2https://www.youtube.com/watch?v=fEbdgpIQ7n4


29

30CHAPTER 9. PRODUCTION OF GOODS AND SERVICES PEOPLE VALUE

RAISES LIVING STANDARDS

a: re�ects that people are achieving higher income levels and living standardsb: requires that individuals work longer hoursc: indicates that scarcity is no longer a problemd: indicates income levels are higher even though environmental and health conditions have

worsened.


31


Solution to Exercise 9.1 (p. 29)d: All of the aboveSolution to Exercise 9.2 (p. 29)a: re�ects that people are achieving higher income levels and living standards.


32CHAPTER 9. PRODUCTION OF GOODS AND SERVICES PEOPLE VALUE

RAISES LIVING STANDARDS


Chapter 10

Economic Progress Comes Through

Trade, Investment, and Sound Economic

Institutions1


Economic progress comes primarily through trade, investment, better ways of doing things,and sound economic institutions.

10.2 Video

This media object is a video �le. Please view or download it at<Global Poverty.mp4>

Figure 10.1: "How to Fight Global Poverty" by the Institute for Humane Studies

Watch on YouTubehttps://www.youtube.com/watch?v=JzmxQOonnGE2

10.3 Exercises


Which of the following contributes to people living in poverty?

a: Stable government and monetary policyb: Strict controls on entrepreneurs, business, and commercec: Poorly de�ned or enforced property rights

1This content is available online at <http://cnx.org/content/m64491/1.4/>.2https://www.youtube.com/watch?v=JzmxQOonnGE


33

34CHAPTER 10. ECONOMIC PROGRESS COMES THROUGH TRADE,

INVESTMENT, AND SOUND ECONOMIC INSTITUTIONS

d: Market-friendly environments


35


Solution to Exercise 10.1 (p. 33)b: Strict controls on entrepreneurs, business, and commerce


36CHAPTER 10. ECONOMIC PROGRESS COMES THROUGH TRADE,

INVESTMENT, AND SOUND ECONOMIC INSTITUTIONS


Chapter 11

Market Prices Direct Buyers And Sellers

Toward The General Welfare1


The �invisible hand� of market prices directs buyers and sellers toward activities that promotethe general welfare.

11.2 Video

This media object is a video �le. Please view or download it at<Invisible Hand.mp4>

Figure 11.1: "Adam Smith: The Invisible Hand and the Key to Human Prosperity" by the Institutefor Humane Studies

Watch on YouTubehttps://www.youtube.com/watch?v=EBifN69gcKY2

11.3 Exercises


What is the importance of Adam Smith's invisible hand?

a: Countries that do not specialize and make use of the division of labor are wealthier than thosethat do not

b: Markets enable people who are acting in their own self-interest to bene�t other people byserving them

c: Governments can successfully centrally plan the economy and fuel overall prosperityd: Markets help wealth countries to become wealthier and poor countries stay poor.

1This content is available online at <http://cnx.org/content/m64528/1.5/>.2https://www.youtube.com/watch?v=EBifN69gcKY


37

38CHAPTER 11. MARKET PRICES DIRECT BUYERS AND SELLERS

TOWARD THE GENERAL WELFARE


Which of the following is a major implication of the invisible hand concept?

a: When directed by competitive market prices, the actions of self-interested individuals willtend to promote overall economic prosperity

b: Prosperity cannot be achieved unless the sel�sh nature of people can be changedc: Competition is harmful to the health of an economy because it results in wasteful duplicationd: Government-operated �rms tend to have lower costs than private sector �rms.


39


Solution to Exercise 11.1 (p. 37)b: Markets enable people who are acting in their own self-interest to bene�t other people by serving them.Solution to Exercise 11.2 (p. 38)a: When directed by competitive market prices, the actions of self-interested individuals will tend to promoteoverall economic prosperity.


40CHAPTER 11. MARKET PRICES DIRECT BUYERS AND SELLERS

TOWARD THE GENERAL WELFARE


Chapter 12

Secondary E�ects Are Often Ignored1


Too often long-term consequences, or the secondary e�ects, of an action are ignored.

12.2 Video

This media object is a video �le. Please view or download it at<Broken Window.mp4>

Figure 12.1: "The Broken Window Fallacy" by the Institute for Humane Studies

Watch on YouTubehttps://www.youtube.com/watch?v=erJEaFpS9ls2

12.3 Exercises


What is the broken window fallacy?

a: Disasters bene�t the overall economy because they result in net job increasesb: Government can ignore the unintended consequences of �scal and monetary policyc: Disasters negatively impact the economy because money spent rebuilding during the aftermath

had alternative usesd: Government intervention leads to strategic investment, e�cient production, and prudent con-

sumption.


1This content is available online at <http://cnx.org/content/m64516/1.3/>.2https://www.youtube.com/watch?v=erJEaFpS9ls


41

42 CHAPTER 12. SECONDARY EFFECTS ARE OFTEN IGNORED

"Mediocre economists often consider only the immediate direct e�ects of a change,whereas a good economist will also consider indirect e�ects and unintended conse-quences that may only become observable over time." This statement most clearlyemphasizes:

a: economizing behaviorb: the importance of secondary e�ectsc: the gains derived from voluntary exchanged: the importance of price signaling


43


Solution to Exercise 12.1 (p. 41)c: Disasters negatively impact the economy because money spent rebuilding during the aftermath hadalternative uses.Solution to Exercise 12.2 (p. 41)b: the importance of secondary e�ects.


44 CHAPTER 12. SECONDARY EFFECTS ARE OFTEN IGNORED


Chapter 13

Discussion Questions1

13.1 Discussion Questions

In this program, you learned about twelve key economic concepts.

1. Which concept did you �nd most enlightening? How can you use it to live a more ful�lling andeconomically secure life?

2. Which concept is most misunderstood by others? Why? How would you explain it to someone whohas never heard of it before?

3. Which concept is still not clear to you personally?

1This content is available online at <http://cnx.org/content/m64490/1.2/>.


45

46 INDEX

Index of Keywords and Terms

Keywords are listed by the section with that keyword (page numbers are in parentheses). Keywordsdo not necessarily appear in the text of the page. They are merely associated with that section. Ex.apples, � 1.1 (1) Terms are referenced by the page they appear on. Ex. apples, 1

D demand, � 5(15)discussion questions, � 13(45)

E economic progress, � 10(33)economics, � 1(1), � 2(5), � 3(9), � 4(11),� 5(15), � 6(19), � 7(23), � 8(27), � 10(33),� 11(37), � 12(41), � 13(45)entrepreneur, � 8(27)entrepreneurship, � 8(27)

F free market, � 11(37)

I incentives, � 1(1)invisible hand, � 11(37)

L living standards, � 9(29)loss, � 7(23)

M macroeconomics, � 4(11), � 6(19), � 10(33)marginal bene�t, � 3(9)marginal cost, � 3(9)marginal thinking, � 3(9)

microeconomics, � 1(1), � 2(5), � 3(9), � 4(11),� 5(15), � 6(19), � 7(23), � 8(27), � 9(29),� 10(33), � 11(37), � 12(41), � 13(45)

O opportunity cost, � 2(5)opportunity costs, � 12(41)

P price, � 7(23)price system, � 5(15), � 11(37)prices, � 5(15)production, � 9(29)pro�t, � 7(23)protectionism, � 6(19)

S supply, � 5(15)

T tari�, � 6(19)trade, � 4(11), � 6(19)

U unintended consequences, � 12(41)

W wealth, � 9(29)wealth creation, � 9(29), � 10(33)


ATTRIBUTIONS 47

Attributions

Collection: Common Sense Economics Part 1: Twelve Key Elements of Economics

Edited by: Institute for Humane StudiesURL: http://cnx.org/content/col12213/1.1/License: http://creativecommons.org/licenses/by/4.0/

Module: "Common Sense Economics: Incentives Matter"Used here as: "Incentives Matter"By: Institute for Humane StudiesURL: http://cnx.org/content/m64504/1.4/Pages: 1-3Copyright: Institute for Humane StudiesLicense: http://creativecommons.org/licenses/by/4.0/

Module: "Common Sense Economics: There Is No Such Thing As A Free Lunch"Used here as: "There Is No Such Thing As A Free Lunch"By: Institute for Humane StudiesURL: http://cnx.org/content/m64520/1.3/Pages: 5-7Copyright: Institute for Humane StudiesLicense: http://creativecommons.org/licenses/by/4.0/

Module: "Common Sense Economics: Decisions Are Made At The Margin"Used here as: "Decisions Are Made At The Margin"By: Institute for Humane StudiesURL: http://cnx.org/content/m64489/1.6/Pages: 9-10Copyright: Institute for Humane StudiesLicense: http://creativecommons.org/licenses/by/4.0/

Module: "Common Sense Economics: Trade Promotes Economic Progress"Used here as: "Trade Promotes Economic Progress"By: Institute for Humane StudiesURL: http://cnx.org/content/m64522/1.3/Pages: 11-13Copyright: Institute for Humane StudiesLicense: http://creativecommons.org/licenses/by/4.0/

Module: "Common Sense Economics: Prices Bring The Choices Of Buyers And Sellers Into Balance"Used here as: "Prices Bring The Choices Of Buyers And Sellers Into Balance"By: Institute for Humane StudiesURL: http://cnx.org/content/m64511/1.4/Pages: 15-17Copyright: Institute for Humane StudiesLicense: http://creativecommons.org/licenses/by/4.0/

Module: "Common Sense Economics: Transaction Costs Are An Obstacle To Trade"Used here as: "Transaction Costs Are An Obstacle To Trade"By: Institute for Humane StudiesURL: http://cnx.org/content/m64523/1.3/Pages: 19-21Copyright: Institute for Humane StudiesLicense: http://creativecommons.org/licenses/by/4.0/


48 ATTRIBUTIONS

Module: "Common Sense Economics: Pro�ts Direct Businesses To Increase The Value Of Resources"Used here as: "Pro�ts Direct Businesses To Increase The Value Of Resources"By: Institute for Humane StudiesURL: http://cnx.org/content/m64515/1.4/Pages: 23-25Copyright: Institute for Humane StudiesLicense: http://creativecommons.org/licenses/by/4.0/

Module: "Common Sense Economics: People Earn Income By Helping Others"Used here as: "People Earn Income By Helping Others"By: Institute for Humane StudiesURL: http://cnx.org/content/m64508/1.4/Pages: 27-28Copyright: Institute for Humane StudiesLicense: http://creativecommons.org/licenses/by/4.0/

Module: "Common Sense Economics: Production Of Goods And Services People Value Raises Living Stan-dards"Used here as: "Production Of Goods And Services People Value Raises Living Standards"By: Institute for Humane StudiesURL: http://cnx.org/content/m64512/1.4/Pages: 29-31Copyright: Institute for Humane StudiesLicense: http://creativecommons.org/licenses/by/4.0/

Module: "Common Sense Economics: Economic Progress Comes Through Trade, Investment, and SoundEconomic Institutions"Used here as: "Economic Progress Comes Through Trade, Investment, and Sound Economic Institutions"By: Institute for Humane StudiesURL: http://cnx.org/content/m64491/1.4/Pages: 33-35Copyright: Institute for Humane StudiesLicense: http://creativecommons.org/licenses/by/4.0/

Module: "Common Sense Economics: Market Prices Direct Buyers And Sellers Toward The General Welfare"Used here as: "Market Prices Direct Buyers And Sellers Toward The General Welfare"By: Institute for Humane StudiesURL: http://cnx.org/content/m64528/1.5/Pages: 37-39Copyright: Institute for Humane StudiesLicense: http://creativecommons.org/licenses/by/4.0/

Module: "Common Sense Economics: Secondary E�ects Are Often Ignored"Used here as: "Secondary E�ects Are Often Ignored"By: Institute for Humane StudiesURL: http://cnx.org/content/m64516/1.3/Pages: 41-43Copyright: Institute for Humane StudiesLicense: http://creativecommons.org/licenses/by/4.0/


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Module: "Common Sense Economics: Discussion Questions"Used here as: "Discussion Questions"By: Institute for Humane StudiesURL: http://cnx.org/content/m64490/1.2/Page: 45Copyright: Institute for Humane StudiesLicense: http://creativecommons.org/licenses/by/4.0/


Common Sense Economics Part 1: Twelve Key Elements of EconomicsThe Institute for Humane Studies has partnered with "Common Sense Economics: What Everyone ShouldKnow about Wealth Creation and Prosperity" to help teach students why economic understanding is essentialfor life in today's society. With videos and quiz question corresponding to each element, this collection canbe used as a study guide for "Part 1: Twelve Key Elements of Economics".

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Common Sense Economics Part 1: Twelve Key Elements of … · 2017. 10. 18. · Common Sense Economics Part 1: Twelve Key Elements of Economics By: Institute for Humane Studies