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    The document outlines 10 principles of economics, including that people face trade-offs, respond rationally to incentives at the margin, and can benefit from specialization and trade. It also notes that markets are generally good ways to organize economic activity but that governments sometimes need to intervene, and that a country's standard of living depends on productivity while too much money printing can lead to inflation and short-run trade-offs with unemployment.

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    Ten Principles of Economics

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    The document outlines 10 principles of economics, including that people face trade-offs, respond rationally to incentives at the margin, and can benefit from specialization and trade. It also notes that markets are generally good ways to organize economic activity but that governments sometimes need to intervene, and that a country's standard of living depends on productivity while too much money printing can lead to inflation and short-run trade-offs with unemployment.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as pdf or txt
    25 views1 page

    Ten Principles of Economics

    Uploaded by

    management 149
    The document outlines 10 principles of economics, including that people face trade-offs, respond rationally to incentives at the margin, and can benefit from specialization and trade. It also notes that markets are generally good ways to organize economic activity but that governments sometimes need to intervene, and that a country's standard of living depends on productivity while too much money printing can lead to inflation and short-run trade-offs with unemployment.

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    © All Rights Reserved
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    TEN PRINCIPLES OF ECONOMICS

    HOW PEOPLE MAKE DECISIONS

    1. People face trade-off

    2. The cost of something is what you give up to get it – opportunity cost

    3. Rational people think at the margin –Additional Benefit and Cost

    4. People respond to incentives –tax on gasoline may reduce mileages,

    encourage public transport

    HOW PEOPLE INTERACT

    5. Trade can make everyone better-off –Specialization

    6.Markets are good ways of organizing economic activity – Invisible hand

    7.Government can sometimes improve market outcomes –farmers need safe crops, restaurants need
    payment by customers.

    HOW THE ECONOMY AS A WHOLE WORKS

    8.Country’s standard of living depends on ability to produce and process goods and services – variations
    due to productivity

    9. Prices rise when government prints too much money

    10. Society faces a short-run trade-off between inflation and unemployment

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