Next, we have the idea that people respond to economic incentives. Right? So incentives. It's people taking advantage of opportunities to make themselves better off. A lot of times in these classes, they use the word exploit. Right? They exploit opportunities to make themselves better off. I saw this really funny example. It was about getting an oil change in New York City. So in NYC, parking for the day when you go downtown to go to your job, you could be spending for all-day parking upwards of 40, 50. I don't know. Someone from New York could probably tell us better, but parking in New York is no joke. So what people started doing was realizing that they could go to a mechanic and just get an oil change, and the oil change ran them let's say $25, $30, and they ended up being able to leave their car at the mechanic all day. So people started just going to the mechanic and getting an oil change, and it's cheaper, literally than just parking for the day. It's crazy. And another example, something very simple. What about apples? You know, when the prices of apples go up, people stop buying apples. They start buying oranges or they buy something else. Right? They're going to exploit opportunities to make themselves better off. Oh, apples are going to be more expensive. The price goes up. Well, I'll take my business elsewhere. The quantity of apples, it's going to go down there. People aren't going to be buying apples anymore. They're going to buy something else. So they're going to take advantage of that opportunity.
0. Basic Principles of Economics
People Respond to Incentives