Landsburg s New Puzzles.

• Author: Murray, Phil R.
• Position: Can You Outsmart an Economist? 100+ Puzzles to Train Your Brain - Book review

Can You Outsmart an Economist? 100+ Puzzles to Train Your Brain

By Steven Landsburg

288 pp.; Mariner, 2018

Steven Landsburg teaches at the University of Rochester, where he ponders the "big questions" and writes terrific, accessible books on economics. His latest is Can You Outsmart an Economist? and it continues this tradition. To Landsburg, "Economics is, first and foremost, a collection of intellectual tools for seeing beyond the obvious." "If this book has a moral," he professes, "it is this: think beyond the obvious."

The book offers a number of puzzles involving economics, probability and statistics, and more. They range from easy to difficult. Consider this easy one:

Suppose the government imposes a price ceiling on wheat, so that instead of selling at the current price of, say $4 per bushel, nobody is allowed to charge more than $3 a bushel. What happens to the price of bread? Don't be fooled into thinking that wheat will be more abundant. Those who are fooled will conclude that the price of bread will fall. A student of economics knows that price ceilings cause shortages. Wheat will become scarcer, the supply of bread will decrease, and the price of bread will rise. Puzzle solved.

Now consider a more difficult puzzle:

My wife and I each drive exactly the same number of miles every day and would continue to do so even if we upgraded our vehicles. Now, which would save more gas--replacing my wife's 12-mile-pergallon SUV with a 15-mile-per-gallon SUV, or replacing my 30-mile-per-gallon car with a 40-mile-per-gallon car? The trap here is to think that replacing the car is a better idea because getting another 10 mpg beats getting another 3 mpg with the SUV. Or that replacing the car is better because 40 mpg is 33% more than 30, whereas 15 mpg with the new SUV is only 25% more than 12. To the contrary, Landsburg explains, "the SUV uses so much gas to begin with that a little added efficiency goes a long way." Replacing the car would reduce the Landsburgs' fuel consumption by 7%, but replacing the SUV would reduce it by 14%. Landsburg later adds that the assumption that he and his wife wouldn't change their driving habits despite the vehicle change is an "arbitrary (and probably quite unrealistic) assumption." It would be realistic to assume that after replacing the SUV with one that gets better gas mileage, his wife will drive more. As a result, they wouldn't get the 14% reduction in fuel consumption.

Better solutions to puzzles anticipate changes in behavior. Landsburg follows up the fuel efficiency puzzle with one about child safety:

...