Learning path
Everyday economics: news, prices and choices
Trade-offs and incentives, how supply and demand set prices, and how to read the headline figures on growth, jobs and inflation. Built on standard introductory economics, with N. Gregory Mankiw's Principles as the main reference.
11 lessons, about 59 minutes in all. Take them in order.
- Trade-offs and opportunity cost 5 min
Why every choice gives something up, and how to count the real cost of a decision.
- Thinking at the margin and incentives 5 min
Why good decisions compare the next bit of benefit with the next bit of cost, and how incentives change what people do.
- Models and the circular flow 5 min
How economists simplify the world with models, from the circular-flow diagram to the production possibilities frontier.
- Positive and normative statements 6 min
Telling claims about how the world is from claims about how it should be, and why economists disagree.
- Demand and what shifts it 5 min
The law of demand, market demand, and the difference between moving along the demand curve and shifting it.
- Supply, equilibrium and shifts 6 min
The law of supply, how supply and demand set the price, and Mankiw's three steps for working out what an event does to a market.
- What money is 5 min
The three jobs money does, commodity versus fiat money, how the money supply is measured, and what a central bank does.
- What GDP counts 6 min
What gross domestic product measures, why income equals spending, and the four parts of spending that make up GDP.
- Real and nominal GDP 5 min
How to separate growth in output from rising prices, using real GDP and the GDP deflator, and how good a measure of well-being GDP is.
- Measuring unemployment 5 min
How the unemployment rate and labour-force participation are measured, and what the official figures miss.
- The costs of inflation 6 min
Why inflation doesn't simply make people poorer, and the real costs it does impose, from shoeleather and menu costs to tax distortions and arbitrary redistribution.