◆ THE ECONOMY
How economies actually work
Markets, firms, prices, and policy, the forces shaping every dollar in your world.
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The Economics Foundation
How economists actually think: scarcity, prices, firms, and markets, built up from the ground. Jump in anywhere.
Start withHealthcare as a Market: Why the Economics of Medicine Break Every Standard Model
U.S. health spending hit $5.3 trillion in 2024. Three features break the standard market: asymmetric information, third-party payment, and inelastic demand.
Read more →- Nudge Theory: Designing Choice Environments to Improve Decisions Without Mandating Them
- What Is Scarcity? The Economic Problem That Never Goes Away
- Comparative Advantage: The Principle Behind Every Trade Relationship on Earth
- The Money You've Already Spent Has Nothing to Do With Your Next Decision
- Tariffs: Winners, Losers, and the Deadweight Loss Nobody Talks About
- The Coase Theorem: When Private Bargaining Solves What Regulation Can't
- Short-Run Profit, Long-Run Erosion: What Happens When Rivals Enter Your Market
Browse by category
- How Incentives Drive Behavior — and Why They Sometimes Produce the Opposite
- The Total Revenue Test: The Fastest Way to Identify Demand Elasticity
- Sunk Cost: Why Past Spending Shouldn't Drive Future Decisions
- Human Capital: The Framework That Treats Skills and Education as Investment
The Firm & Production 21Competition & Monopoly 22Imperfect Competition 14Labor Economics 12Factor Markets 8
All of Firms & Markets · 77 →Common questions
Producer Surplus: The Value Sellers Capture Beyond Their Minimum Price
Producer surplus is the difference between the price a seller receives and the minimum price they would have accepted.
Read more →Public Goods: What Markets Can't Provide on Their Own
A public good is non-excludable and non-rival. Free-riding prevents private markets from supplying it efficiently, making government provision or subsidy…
Read more →Absolute vs. Comparative Advantage: The Distinction That Explains Trade
Absolute advantage is the ability to produce more of a good with the same inputs. Comparative advantage is the ability to produce at lower opportunity cost.
Read more →Fixed vs. Variable Costs: How Cost Structure Shapes Business Decisions
Fixed costs don't change with output; variable costs do. The ratio between them determines a firm's operating leverage, its break-even point, and how it…
Read more →Switching Costs: The Friction That Keeps Customers Locked In
Switching costs are the costs a buyer incurs when changing from one supplier or product to another.
Read more →What Is Monetary Policy?
Government actions to control the money supply and interest rates to achieve economic goals like price stability and employment. Learn the difference between…
Read more →Social Mobility: The Ability to Move Up (or Down) the Economic Ladder
Social mobility measures how much a person's economic position can differ from their parents' — whether birth circumstances determine destiny.
Read more →The Network Effect: Why Some Products Become More Valuable as They Grow
Network effects occur when a product's value increases as more people use it. They are the primary driver of winner-take-all market dynamics in technology,…
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