The Top 5 Most Misunderstood Economic Concepts

Discussion in 'Economics' started by spy, Oct 9, 2024.

  1. spy

    spy

    There are a lot of economic concepts people get wrong. Here are some of the most common missteps.
    • Scarcity
      • we have virtually unlimited wants, and yet we live in a world where the means for satisfying these wants are limited
    • Greed
      • it makes no sense to explain price changes by referring to avarice
    • Economic Growth
      • it is not physical resources which limit economic growth. It’s knowledge
    • Public Goods
      • the definition of a public good has nothing to do with whether a good is or is not currently provided by the government
    • Capitalism
      • an economic system characterized by private ownership of the means of production and free exchange with the goal of making profits
     
    Last edited: Oct 9, 2024
    countryBoy641 likes this.
  2. mervyn

    mervyn

    Communism

    - a type of government as well as an economic system (a way of creating and sharing wealth). In a Communist system, individual people do not own land, factories, or machinery. Instead, the government or the whole community owns these things. Everyone is supposed to share the wealth that they create.

    Socialism

    - an economic system in which major industries are owned by workers rather than by private businesses. It is different from capitalism, where private actors, like business owners and shareholders, can own the means of production.
     
  3. spy

    spy

    These systems differ from capitalism in that they don't allow for the free (un-coerced) exchange of goods and services.

    Now, give me all your stuff or I'll beat you up! :D
     
  4. The fallacy that its harder for a stock to recover from a 50% drop because it needs a 100% gain.
     
    piezoe likes this.
  5. maxinger

    maxinger


    Another economic concept :
    buylowsellhigh and sellhighbuylow concept
     
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  6. mervyn

    mervyn

    under non capitalist society, the exchanges themselves are free because there is no money. Activity by itself has no monetary value, just different role and skill set.

    for example, a doctor and a patient both go to the hospital by sharing a driverless uber should be free.
     
  7. mervyn

    mervyn

    that’s not economic
     
    spy likes this.
  8. spy

    spy

    What if the doctor doesn't want to operate that day but instead wants to go swimming?

    Bear in mind, we're not talking about "free" as in "free beer"... we're talking about "free" as in "liberty/freedom".
     
    Last edited: Oct 9, 2024
  9. spy

    spy

    Good one! But, I think this is related to finance much more than it is to economics.
     
  10. mervyn

    mervyn

    sure more than one doctor who can read charts.
     
    #10     Oct 9, 2024