Quote from: malditonuke on April 18, 2011, 12:15:40 PM

Quote from: Gluskab on April 18, 2011, 11:16:27 AM

Economics is 99% common sense applied rigorously.

However, just because it is not complicated, does not mean it cannot be hard.

Economics is no more common sense than math is, and probably even less so.

1. If lots of people want something, the price goes up relative to what it would be if fewer people wanted said product (and vice-versa)

2. If lots of people have and/or produce something, the price goes down relative to what it would be if fewer people supplied said product (and vice-versa).

3. Incentives matter.

Most everything follows from there (if applied rigorously), and point 3 is the most important point in most cases.

Just because it is not complicated, does not mean it is not hard. However, most of the 'hardness' comes from having to undo all the mental gymnastics that you're put through to explain why, all of a sudden, the opposite of core economic principles apply in this special case.