Review of "The Instant Economist."

Essay by Icedragon256High School, 12th gradeA+, October 2005

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"The Instant Economist" is a brief in-depth overview of basic economic concepts. The book centers around a young man who after college is told that his economics classes taught him nothing of economics. This man goes to see a professor friend of his father's, and learns everything everyone needs to know to have a simple understanding of economics.

The book starts with macroeconomics, with such concepts as inflation, unemployment, government spending, private spending, and savings and their relation to each other. The model used to express this relationship is a tub with two faucets, the tub representing unemployment and inflation, and the faucets representing spending and income in both the private and governmental sectors; also discussed are interest rates and their effect on the market. If too much spending occurs from either faucet, and this is not compensated by faster draining, then this can lead to inflation; if the drain drains to fast and is not matched by a faster input rate, unemployment occurs; if one faucet and drain system is used too much or in an akward fashion, a lopsided market can occur.

The next grouping of concepts to be reviewed is microeconomics. Instant Economist explains the ideas of opportunity cost, marginal benefit, static and variable costs, and the effect of these concepts on rational self-interest. Different classifications of markets are also introduced, such as pure competitive, pure monopoly, and monopolisticly competitive; along with these classifications, the way a company operates in these markets, or the way one should operate, is also introduced. The basic operating principle behind this set of market survival is supply and demand; in each of the different markets there are different competitors and barriers that drive popular demand, and thus proper business procedure in these markets. Included are such seemingly counter-intuitive ideas...