[This is part of the series: The Complete Guide To Economics 101.]
I have heard it said that the field of economics is nothing but painfully stating the obvious.
This assertion feels like that.
People respond to incentives.
It is common sense, really – that people overall weight costs and benefits.
- If the price of hotdogs goes up, people will buy fewer hotdogs – and hotdog buns.
- If property taxes are made lower, people will buy more of a house.
- Lower investment taxes, will lead to more investments.
- Higher gasoline taxes will cause less gasoline to be purchased.
- And price floors and price ceilings have consequences.
This is true for groups, like in the examples above, and it is also true for individuals.
It is true for me.
- I take fewer trips to the Tamaya Resort And Spa when their prices go up,
- I change careers when the money is worth it.
- I eat more when it is free.
- And I am more humble when I am broken.