Market Equilibrium Quotes

The first rule of economics is that there is an infinite number of desires chasing a finite number of goods, services and resources. The first rule of politics is to ignore the first rule of economics.

Sellers in general maintain the quality of their products and services for fear of losing customers otherwise. But, when price controls create a situation where the amount demanded is greater than the amount supplied - a shortage - fear of losing customers is no longer as strong an incentive. For example, landlords typically reduce painting and repairs when there is rent control, because there is no need to fear vacancies when there are more tenants looking for apartments than there are apartments available.

Prices impose the most effective kind of rationing - self-rationing. Why is rationing necessary? Because what everybody wants always adds up to more than there is. . .Resources are limited but desires are not. That is the basic and defining problem of economics.

A shortage is a sign that somebody is keeping the price artificially lower than it would be if supply and demand were allowed to operate freely.

Money is different from all other commodities: other things being equal, more shoes, or more discoveries of oil or copper benefit society, since they help alleviate natural scarcity. But once a commodity is established as a money on the market, no more money at all is needed. Since the only use of money is for exchange and reckoning, more dollars or pounds or marks in circulation cannot confer a social benefit: they will simply dilute the exchange value of every existing dollar or pound or mark.

As an economist, whenever I hear the word shortage I wait for the other shoe to drop. That other shoe is usually price control.

It is a fact worth pondering that four centuries ago the evil of "an abundance or surplus" arose from its being kept off the market, while today the evil of surplus lies in its being thrown upon the market.

If, however, a government refrains from regulations and allows matters to take their course, essential commodities soon attain a level of price out of the reach of all but the rich, the worthlessness of the money becomes apparent, and the fraud upon the public can be concealed no longer.

We economists don't know much, but we do know how to create a shortage. If you want to create a shortage of tomatoes, for example, just pass a law that retailers can't sell tomatoes for more than two cents per pound. Instantly you'll have a tomato shortage. It's the same with oil or gas.

The equilibrium between supply and demand is achieved only through a reaction against the upsetting of the equilibrium.

I put forward a pretty general theory that financial markets are intrinsically unstable. That we really have a false picture when we think about markets tending towards equilibrium.

People are always trading their excess for somebody else's excess. One country has a lot of aluminum so they trade aluminum for sugar. It's the law of supply and demand.

Reversion to the mean is the iron rule of the financial markets.

Perhaps the most widespread misunderstanding of economics is that it applies solely to financial transactions. Frequently this leads to statements that "there are noneconomic values" to consider. There are, of course, noneconomic values. Indeed, there are only noneconomic values. Economics is not a value itself but merely a method of trading off one value against another.

If you hear a "prominent" economist using the word 'equilibrium,' or 'normal distribution,' do not argue with him; just ignore him, or try to put a rat down his shirt.

Market prices are always wrong.

But my shift to the serious study of economics gradually weakened my belief in Major Douglas's A+B theorem, which was replaced in my thought by the expression MV = PT.

At the beginning of my sophomore year at Princeton University, I took my first economics course; our textbook was the first edition of Samuelson's 'Economics: An Introductory Analysis.'

Economists are economical, among other things, of ideas; most make those of their graduate days do for a lifetime.

At the simplest level, economics can better show us the consequences of our actions. Less simple are cases in which we don't have the knowledge to predict the full consequences. Global warming and climate change are examples.

If no one consumes these products, people will stop roducing them. They will not build it if you didn't come.

There cannot be overproduction of anything which men and women want. And their wants are unlimited, except by the size of their stomachs.

If every other store in town is paying workers $9 an hour, one offering $8 will find it hard to hire anyone - perhaps not when unemployment is high, but certainly in normal times. Robust competition is a powerful force helping to ensure that workers are paid what they contribute to their employers' bottom lines.

How could economics not be behavioral? If it isn't behavioral, what the hell is it?

As you know, low demand and high supply means a drop in value of anything, including the dollar.