The Economic Way of Thinking

March 22, 2022
Economics is more than puzzle-solving. Without economics, we don't have a systematic way of grappling with the big questions like growth or business cycles.
Nonetheless, a healthy dose of puzzle-solving is an important ingredient in acquiring the mental framework for thinking like an economist. Indeed, while the "economic way of thinking" is central to being a good economist, it's seemingly taught less frequently to young economists in contemporary Ph.D. programs. As a way of pushing back on this sorry state of affairs, my annual Intermediate Micro class features a handful of "economic way of thinking" questions each period. We discuss them as a class.
Most questions are no more than a sentence. Some are open-ended, but most have a definitively correct answer, discernible only to those wearing their economic eyeglasses.
All but a few of these questions are unoriginal to me. They come from Walter Williams, who adopted many of them from Armen Alchian, Steven Landsburg, Yoram Barzel, Deirdre McCloskey, Gary Becker, and others I wish I could more easily recall.
Because I've received so many requests for a "list" of these questions over the last few semesters, I decided to include my students' favorites here. I like to think of these as the “pure logic of choice,” or perhaps “mere economics.”
Always open to more suggestions-send more questions my way!
Why have shopping carts gotten bigger over time?
Why do people with more desirable marriage characteristics often marry later?
Are arbitrary attributes (i.e. race, sex, etc...) more likely to be used as a selection criteria for lower-level jobs (i.e. custodian) or higher-level jobs?
Why is obesity more prevalent in 2022 than in 1922?
Why do we tip our waiter, but not our brain surgeon? My favorite question.
Why does purchased blood have a higher incidence of hepatitis contamination relative to donated blood?
Why do more attractive teachers get better teaching evaluations on average?
Is smoking bad for your health?
Do taxicab medallions confer profits in perpetuity on taxicab drivers?
The physical productivity of barbers has remained constant over the last century, yet their real wages have risen dramatically. Why? A question that famously stumped a majority of Ph.D. students in economics during the 1990's. Presumably, the situation is worse now.
Why do governments build infrastructure that lasts so long? Armen Alchian said he didn't know the answer.
Why do utilities companies, granted a regional monopoly, expend resources on advertising?
What would happen if blackmail were legalized?
How did the 9/11 terrorists continue to kill American citizens after 9/11 (and don't make reference to war in your answer)?
How might an FCC penalty for profanity in TV shows alter the proportion of alternative swear words written into shows?
Doctors often charge higher prices to wealthy patients than to poorer patients. Why?
A tourist to Paris may notice that many lunch menus list higher prices on the English menu than the French menu, even for the same dishes. Why?
Why do women's hair products, razors, and the like sell for higher prices than men's?
Why will you typically pay more when you book a flight the night before, as opposed to a month before?
When tomatoes are sold separately, their per unit (i.e. per tomato) prices is higher than when they are packaged together. Why?
Why does popcorn cost so much at the movies?
Do companies suppress innovation (do they engage in "planned obsolescence")?
Do farmers benefit from bountiful harvests?
Do producers who rent machines possess a cost advantage over those who buy?
Why does school "pay"?
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