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on The Economic Conversation
Chapter 5.
To Buy or Not To Buy
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1. A First Look at Economics
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2. Prudent Choice
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3. The Invisible Hand
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4. Visible Hands
- 5. To Buy or Not To Buy
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16. Perfect to Imperfect
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20. Issues in Macroeconomics
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33. Policy Making
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34. Joining the Conversation
- Suggest a heterodox box or comment on an existing one
- Comment on "Problems & Exercises, Pluralistically Speaking"
- Comment on the dialogue about "Speaking 'Economics'"
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Graham: What is a cynic?
Oscar Wilde (1854-1900),
Lady Windermere's Fan, Act III PREVIEWThe economic words for buyer and seller are, as you know, "demander" and "supplier." The two flow together in markets. To understand markets you need to understand each of these-supply and demand-more deeply. Begin with demand. Why do people buy the amounts they do? In particular, why are they willing to pay only a little for an essential item like water and so very much for an unnecessary item like diamonds? One answer comes from the economist's "Rule of Rational Life." |