59 Key Economic Concepts Covered in the Common Sense Economics Curriculum

Common Sense Economics

  • Part 1 focuses on the basic concepts of economics, including incentives, scarcity, opportunity cost, marginalism, gains from trade, demand, supply, the pricing mechanism, and secondary effects.
  • Part 2 focuses on the key elements of an environment for growth and prosperity. The importance of property rights, the competitive process, allocation of capital, monetary stability, low taxes, and international trade are analyzed.

  • Part 3 focuses on the role of government and the operation of the political process. Both market failure and government failure are explained. As in the case of markets, the tools of economics are used to address how the political process works, why it sometimes works poorly, and what might be done to improve the process.

  • Part 4 applies the tools of economics to personal finance. Choosing a career, entrepreneurship, budgeting, saving, investing, credit, and taxes are considered in this section. This course is designed for those who want to learn a lot about economics quickly.

59 Key Economic Concepts Covered, Aligned with National Standards

  • Incentives
  • Scarcity
  • Opportunity costs
  • Marginalism
  • Gains from trade
  • Transaction costs
  • Demand and supply
  • Market equilibrium
  • Demand and supply (more)
  • Changes in demand vs. changes in quantity demanded
  • Changes in supply vs. changes in quantity supplied
  • Price controls
  • Profit and loss
  • Helping others and receipt of income
  • Jobs versus the creation of wealth
  • Source of economic progress
  • Market prices and the invisible hand
  • Secondary effects and unintended consequences
  • Legal system and private ownership
  • Private property and incentives
  • Competitive process
  • Regulation and gains from trade
  • Capital markets: wealth-creating versus inefficient projects Monetary policy and inflation
  • Taxes, incentives, and productive activity
  • Gains from international trade
  • Economics, politics, and trade restrictions
  • Economic freedom, growth, and income
  • Recession and depression
  • Economic instability
  • Monetary policy and Great Depression
  • Tariffs and trade restrictions
  • Taxes, subsidies, and instability
  • Protective and productive roles of government Market failure
  • Government failure
  • Opportunity cost of government
  • Political versus the market process
  • Special interest and political allocation
  • Political incentives and short-sightedness
  • Transfers, incentives, and the “welfare” of recipients
  • The unintended consequences of transfers and subsidies Central planning, politics, and resource allocation Competition among governments, incentives, and resource allocation
  • Constitutional rules and sound economics
  • Comparative advantage and discovery of career opportunities
  • Entrepreneurship and personal success Budgeting and getting more out of your income Strategic spending: used versus new
  • Dangers of debt and credit card use
  • Prudent saving: planning for a “rainy day” Power of compound interest
  • Diversification and reducing investment risk Risk and return: stocks versus bonds
  • Random walk theory and stock prices
  • Indexed versus managed equity funds
  • Portfolio adjustments and phases of life
  • Beware of investment schemes
  • Teach others sound financial principles