The eight guideposts to economic thinking

The Eight Guideposts to Economic Thinking


Even though economists have philosophical differences, their approach covers a common ground found in the eight guideposts to economic thinking. The eight guideposts to economic thinking are very important because they are essentially the “building blocks” of basic economic theory. Even though the guideposts may seem like common sense, these concepts provide interesting and powerful insights.
The use of scarce resources is costly; trade-offs must always be made. This guidepost is commonly referred to as the “there is no such thing as a free lunch” principle. Choices imply trade-offs and opportunity cost. This point is easily illustrated in the case of the new NBA arena being built in downtown Memphis, Tennessee. The amount of resources (money, land, etc.) being poured into the new arena represents resources that will be used for recreation and not for other purposes such as education, housing, or hospitals. The “NBA Now” camp ...