Learning items
Economics in One Lesson
No chapter association
ConceptBroken-window fallacy
Repair spending alone does not establish that destruction increased wealth.
ConceptOpportunity cost
The opportunity cost of a choice is the value of its next-best forgone alternative.
ConceptReplacement versus addition
Restoring a lost asset and adding a new asset have different baselines.
ConceptShort-run and long-run effects
The effects of a decision can differ across time horizons.
ConceptWealth versus spending
Spending is a flow over time; wealth is a stock of assets, generally net of liabilities.
VocabularyCounterfactual baseline
A counterfactual baseline describes the alternative outcome used to assess a change.
