This interview question stumped me

Not really, my answer was adequate. Experimenting with click-bait titles.

Recently went to an interview where, after finding out I studied economics, he asked

what are 3 things about economics you think everyone should know?

First off, great question. Anyone who studied a thing for 3 years should have an answer to this. I did not prepare for this specific question, but I think I gave a decent answer (albeit as a ramble). Here's what I said.

Note: I did no further research after the interview to prepare this post. Errors in explaining the concepts reflect gaps in my understanding. Links to further reading attached at the end of each point.

1. The supply-demand graph. Oversupply of a product with low demand will cause prices to drop. And supplying a product with no demand at all doesn't make sense. Sounds sensible. But, do people test whether their product has legs before doing product development? Further reading: What Are Supply and Demand Curves? - From MindTools.com, How to Calculate Market Demand for Your Ecommerce Business (shopify.my)
2. Price elasticity of demand (PED)*. You can charge 'premium' prices for products with inelastic or sticky demand. Say you're indifferent about the brand and quality of a pen. You won't waste time comparing two pens in a bookstore. Knowing this, cheap pen producers will compete on price, i.e. setting the lowest price for the pens that makes sense for their business. We'd call demand for cheap pens elastic. If there's a cheaper alternative, I'd buy that. But let's say you're a pen connoisseur. You love the smooth feel of a pen gliding across the paper and often write letters to your friends. If this is you, you'd pay way more attention to pen quality. Out of all the pen producers in the market, let's say only 2 produce premium pens, and the rest produce cheap pens. The premium pen producers charge a higher price for their than the mass-produced pens. They know that you (pen fanatic) are not looking for the cheapest pen, but for the best quality pen. But how do you then choose between these two high quality pens? That's where the quality and branding come into play. This is an example of inelastic demand. Another form of inelastic demand is if there are no substitutes for your product. If they need your product, and don't have alternatives, it has inelastic demand. That's why food and drink at music festivals are ridiculously expensive. Further reading: Elasticity - Overview, Examples and Factors, Calculation (corporatefinanceinstitute.com), Festival goers shelling out £67 a day as the cost of food and entertainment racks up – The Sun
3. Most markets are not free. In the sense that regulators and policies play a key role in determining how a market operates. Think of subsidies that artificially lower prices. Think of policies that limit the number of suppliers (in countries with National Oil Companies for example). Think of product taxes that make something more expensive (carbon tax, anyone?). Think of price ceilings set by regulators (e.g. price caps on key household foods during festive seasons). Further reading: Government Intervention in Markets: Examples & Types (studysmarter.de), 22 food items placed under price control scheme from April 26 to May 6 (nst.com.my)

In general this is a great interview question that can apply to most of your past experiences. "What are the key takeaways from X experience?"

*I think my understanding of PED needs some updating.