Economics in Two Lessons: Chapter 3

Thanks to everyone who commented on Chapter 2 of my book, Economics in Two Lessons. I’ve learned a lot from the comments but haven’t yet had time to respond to them.

Now here’s the draft of Chapter 3. Again, I welcome comments, criticism and encouragement.

The book so far is available
Table of Contents
Introduction.
Chapter 1
draft of Chapter 2
Feel free to make further comments on these chapters if you wish.

4 thoughts on “Economics in Two Lessons: Chapter 3

  1. Your section called Uncertainty should really be called Risk, or at least your examples are examples of risk. Insurance companies know (or try to estimate as best they can) the likelihood of events and even weather forecasters will say what the percent chance of rain is.

    So maybe a sentence or two on the difference between risk and uncertainty would be helpful.

  2. John – re your last sentence, “Unfortunately, I’m not aware of a good simple introduction to the economics of uncertainty that captures opportunity cost in a way I could recommend”, I would have thought Frank Knight’s Risk, Uncertainty and Profit (part 2, ch. 3) does a pretty good job. also makes references to Robinson Crusoe!. Sorry if I have been doing too much time in the back rooms of the library, but Knight’s stuff remains important.

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