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Shvoong Home>Social Sciences>The Undercover Economist Summary

The Undercover Economist

Book Summary   by:MissMantis     Original Author: Tim Harford
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What do you see when you sit in an airport, having a cup of coffee for which you have paid Star Bucks quite bit of price? you see, people in motion, you see well-lit, well-furnished corridors, you see shops and loads of them. Something about these shops strikes you, that they offer goods at a considerably high price, and you wonder why? This is exactly what this book tries to explain to a lay-man, because when an economist sits in an airport, paying a high price for a cup of coffee, he sees the dynamics of economics in full force. This book is amazing to understand the basics of how the whole economic system works, without the trouble of understanding the jargon. This book is based on the fundamental principle of supply and demand, which it has very subtly tried to establish in each of it's chapters. So why exactly would you pay a high price for cup of coffee, even though you know you could get it way cheaper outside the airport? well, a) because you are limited by choice and scarcity, and these two problems in economics form the crux of the production sector and the consumption sector, b) because you want the coffee, and you want it now. So essentially, economics is all about want and desire, and the availability of resources to fulfill and satisfy those wants and desires. Based on this, the producers act accordingly, knowing what the people want and calculating how effectively they can utilize resources into offering the people something to satisfy their want. It's a good read for people looking to understand why we pay the amount we pay for something, or why we are ready to pay the particular amount quoted. All in all, a bird's view on the subject matter of economics.
Published: June 03, 2008   
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  1. Answer   Question  :    can you tell me the summary of chapter 2 please? I am very confuse with a lot of context and meanings and it be really great if you can fill me in a little bit =) View All
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