In the book The Armchair Economist: Economics and Everyday Life, Steven E. Landsburg explains economic theories and applies them to current problems and situations. He begins with the basic concepts of economics and builds off those to more complex theories and situations. The simplified models and easy to understand examples he uses make the theories of economics less daunting and easier to understand. On top of being simple, his examples are also current making them easier to comprehend because they are contemporary with my own life.
In chapter four of Landsburg’s book The Armchair Economist: Economics and Everyday Life he discusses the indifference principle. The indifference principle states that, “Unless you are unusual in some way, nothing can ever make you truly happier than the next best alternative,” (39). This principle can be hard to understand, but Landsburg’s examples made the principle simple and easy to understand. One of the examples he used was a person’s preference of type of cheese, “ You might prefer cheddar cheese to provolone, but if all your neighbors share your preference, then the price of cheddar cheese must rise to the point where you’re just as happy to buy provolone,” (39). This example along with ones using living conditions in cities, outdoor activities, and weather preferences made understanding the indifference principle easy. If everybody was the same, no one thing could make people happier than something else. It is our unusual preferences that make one thing more valuable to us or make us happier than something else.
Chapter four of Landsburg’s book The Armchair Economist: Economics and Everyday Life is also a perfect example of Landsburg employing the use of simplified models to explain complicated economic principles and theories. Landsburg uses simplified models throughout his book to clarify the theories he is explaining. Using these simplified versions of society and creating the ideal situations to...
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