Economics

Compound interest means earning interest on both the money you save and the interest already added.

Picture a meadow open to every herder in a village.

Sellers choose prices, but supply and demand influence what buyers will pay.

An afternoon can hold only so much.

Saving money can be difficult when income barely covers daily needs.

Life brings surprises, and many of them cost money.

In some situations, results are not shared out evenly.

Suppose Mira can bake four loaves in an hour or repair two pairs of shoes.

You have paid for a concert ticket that cannot be refunded or resold, and on the evening of the show you feel exhausted and unwell.

Being faster at two tasks does not necessarily mean it is best to do both yourself.

One way to increase production is the division of labor.

Imagine adding workers to a kitchen while keeping its floor space and equipment fixed.

When protection shifts some consequences of a risky choice to someone else, it can change the incentive to take care.

Imagine a farmer who wants shoes and offers eggs in exchange.

Inflation is a rise in the general level of prices over time.

Imagine an insurer covering one thousand similar houses.

Before modern container shipping, dockworkers handled much cargo as separate sacks, barrels and crates.

Imagine two people preparing meal boxes and making signs for an event.

A used-car seller may know years of service history, while a buyer has had only a short inspection.

An interest rate expresses a borrowing charge as a percentage, usually stated per year.

Consider tin used in solder for joining metal parts.

New technology can expand production while reducing demand for older methods.

Gross domestic product, or GDP, measures the value of final goods and services produced within an economy during a period.

Two boxes of the same rice sit on the shelf.

Tap water can cost very little per glass, yet supplying it requires an expensive network.

Insurance combines the risks of many policyholders.

Why might a small jeweler choose an expensive central shop while a furniture showroom seeks more space farther out?

Some auctions begin with a low price and invite people to bid upward.

Imagine two job applicants who claim to be reliable.

A lighthouse sends a warning beam across dark water.

A delivery company chooses noisy trucks because they are cheap to operate.

Suppose students rank schools, while each school has limited seats and a stated priority order.

A bank may advertise an account with no switching fee.

Imagine two food shops facing the same square.

At closing time, a shoe shop counts pairs still on its shelves.

Three passengers share one row of a train.

Suppose a person chooses between a modest reward today and a larger reward next month.

Before anyone arrives at a community pottery room, the group must pay for rent, tables, shelves, and a kiln.

In a simple sealed-bid auction, each bidder writes one offer without seeing the others.

A trail can be free to enter without being free to provide.

A drink container may be worth little after it is empty.

A machine's purchase price is only one part of what it costs to use.

A hiker reaches a rest stop with no water left.

At a market with no posted prices, each sale begins as a fresh conversation.

A market sells soup in sturdy glass jars.

A string quartet owns four fine instruments and has been invited to play at a neighborhood celebration.

At the end of a market day, three cooperatives compare their accounts.

A grocery store could lower the price of soup for everyone.

A worker who moves to another city or country may regularly send part of each paycheck to relatives.

A hotel room can be sold for one night only once.

A popular free class has twenty seats and sixty interested students.

Suppose a basket of rice, rent, transit, soap, and medicine costs 100 currency units in one country and 200 in another.

Suppose a toaster comes with a one-year warranty from its seller.

A trader needs goods now but can pay after selling.

A market does not always have stalls or one address.

A farmer must choose seed before knowing how much rain the season will bring.

In a worker cooperative, worker-members collectively own and govern the enterprise.