Modern Principles of Economics by Tyler Cowen and Alex Tabarrok
1. Incentives: Rewards and penalties that motivate behaviour
2. Big Idea One: Incentives matter
3. Big Idea Two: Good Institutions Align Self-Interest with the Social Interest
4. Big Idea Three: Trade-offs are everywhere
5. The opportunity cost of a choice: The value of the opportunities lost
6. Big Idea Four: Thinking on the margin
7. Thinking on the margin: Making choices by thinking in terms of marginal
benefits and marginal costs
8. Marginal cost: The additional cost from producing a little bit more
9. Marginal revenue: The additional revenue from producing a little bit more
10. Marginal tax rates: The tax rate on an additional dollar of income
11. The importance of thinking on the margin did not become commonplace
in economics until: 1871
12. Marginal thinking was simultaneously described by three economists::
William Stanley Jevons
Carl Menger
Leon Walras
13. The real power of trade is: the power to increase production through
specialization
14. Specialization increases: productivity
15. Economies of scale: the reduction in costs created when goods are mass-
produced
16. The theory of comparative advantage says that: when people or nations
specialize in goods in which they have a low opportunity cost, they can trade
to mutual advantage
17. Wealth comes from: economic growth
18. Big Idea Five: The Power of Trade
19. Big Idea Six: The Importance of Wealth and Economic Growth
20. Big Idea Seven: Institutions Matter
21. Among the most powerful institutions for supporting good incentives
are: property rights political stability
honest government a
dependable legal system
competitive and open
markets
22. Big Idea Eight: Economic Booms and Busts Cannot Be Avoided but Can Be
Moderated
1. Incentives: Rewards and penalties that motivate behaviour
2. Big Idea One: Incentives matter
3. Big Idea Two: Good Institutions Align Self-Interest with the Social Interest
4. Big Idea Three: Trade-offs are everywhere
5. The opportunity cost of a choice: The value of the opportunities lost
6. Big Idea Four: Thinking on the margin
7. Thinking on the margin: Making choices by thinking in terms of marginal
benefits and marginal costs
8. Marginal cost: The additional cost from producing a little bit more
9. Marginal revenue: The additional revenue from producing a little bit more
10. Marginal tax rates: The tax rate on an additional dollar of income
11. The importance of thinking on the margin did not become commonplace
in economics until: 1871
12. Marginal thinking was simultaneously described by three economists::
William Stanley Jevons
Carl Menger
Leon Walras
13. The real power of trade is: the power to increase production through
specialization
14. Specialization increases: productivity
15. Economies of scale: the reduction in costs created when goods are mass-
produced
16. The theory of comparative advantage says that: when people or nations
specialize in goods in which they have a low opportunity cost, they can trade
to mutual advantage
17. Wealth comes from: economic growth
18. Big Idea Five: The Power of Trade
19. Big Idea Six: The Importance of Wealth and Economic Growth
20. Big Idea Seven: Institutions Matter
21. Among the most powerful institutions for supporting good incentives
are: property rights political stability
honest government a
dependable legal system
competitive and open
markets
22. Big Idea Eight: Economic Booms and Busts Cannot Be Avoided but Can Be
Moderated
