Analysis Of Armchair Economist: Economics And Everyday Life

My though about economics in the pass was that it only a foundation of financial livelihood. The book I assigned to read in the Economics class I am attending has raised a great doubt on the perspective I had. The book called “Armchair Economist: Economics and Everyday Life”, by an American economics professor of Rochester University Steven Landsburg, convinces me in many ways that economics can be applied in daily life and many problem we face. This essay will describe the great characteristics of the book from beginner economics student, a summery of the book and few of my favorite chapters and along with how I may apply the concept in my way of life.

As considering myself as a beginner to the economics field, the book has provided me
The concepts are “Rational Riddles and Truth or Consequences”. Rational Riddles explains why assuming people that they are rational are not always right. “Well, people are often rational, but not always. Economics applies to some behavior, but not to all behavior. These are some of the exceptions” An alternative response is to stubbornly maintain the fiction that all people are rational at all times, and to insist on finding rational explanations, no matter how outlandish, for all of this apparently irrational behavior. It encourages digging deeper to find the right answer for the irrationals. The example situation is why not raising the ticket price of the Rolling Stones concert even though it will be sold out anyways. The chapter Truth or Consequences gives a very effective ways to deal with person who knows more than you do. The suggestions are; two general approaches to mitigating your disadvantage. One is to design mechanisms that elicit appropriate behavior. The other is to design mechanisms that elicit the information itself. In recent years, economists have discovered that, contrary to all intuition, there are a fantastic number of mechanisms that can often induce people to reveal everything they know. The example story is very interesting, it is from Joseph Conrad's novel Typhoon, a number of sailors store gold coins in private boxes kept in the ship's safe. The ship hits stormy weather, the boxes break open, and the coins are hopelessly mixed. Each sailor knows how many coins he started with, but nobody knows what anybody else started with. The captain's problem is to return the correct number of coins to each sailor. Does the problem seem intractable? Here is a simple solution. Have each sailor write down the number of coins he is entitled