What is economic?

0 Key Economic Concepts 1 Incentives matter. 2 There is no such thing as a free lunch. 3 Voluntary exchange promotes economic progress. 4 Transaction costs are an obstacle to exchange: reducing this obstacle will help promote economic progress. 5 Increases in real income are dependent upon increases in real output. 6 The four sources of income growth are: {a} Improvements in worker skills {b} Capital formation {c I Technological adva ncements It!) Better economic organization 1' Income is compensation derived from the provision of services to others. People earn income by helping others. B Prots direct businesses toward activities that increase wealth. 9 The "Invisible Hand" Principle: Market prices bring personal self-interest and the general welfare into harmonv. 10 Ignoring secondaryr effects and longterm con sequences is the most common source of error in economics. FRASER INSTITUTE