Markets, incentives, and how economies behave.
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4concepts
The law of diminishing returns says that as one input to production keeps increasing while every other input stays fixed, each additional unit adds less extra output than the unit before it, and eventually may add none at all.
Comparative advantage is the ability to produce something at a lower opportunity cost than another party, which makes trade beneficial even when one party is better at everything.
Opportunity cost is the value of the best alternative given up when you choose one option, counting only the next-best choice, not every option rejected.
A method for deciding whether an action is worth its price by giving every cost and benefit a money value and comparing the totals.
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