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13 Cards in this Set
- Front
- Back
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Pricinpiles of how people make decisions.
what is principle #1 |
People face tade-offs
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Pricinpiles of how people make decisions.
what is principle #1 for SOCIETY |
society faces the trade-off of
effeciency vs equality |
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What is Principle #2
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the cost of something is what you give up to get....the definition of OPPORTUNITY COST
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What is Principle #3
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Rational People think at Margine.
Margine = making decisions base on the cost and benefits in 'marginal changes' |
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What is Principle #4
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People respond to Incentives.
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What is Principle #5
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Trade can make everyone Better off.
when you specialize...countries benefit from specialized production of a good they can trade. china makes rice for america. america cannot grow rice...america specializes in corn... |
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What is Principle #6
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markes are a good way to organize economic activity.
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Principle #6 note...what is the invisible hand?
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the interaction of buyers and sellers that create price.
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What is Principle #7
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govt can sometimes improve market outcomes
people are less likely to produce is they are going to be robbed. govt. protects ple produce more. |
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What is Principle #8
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countries standard of living lies in its ability to produce goods and service. this ties in with principle 5.
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Principle #8
the most important determinant of living standards is what? |
Productivity
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What is Principle #9
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Prices rise when the gov. prints to much.
Inflation |
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What is Principle #10
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inflation vs unemployment
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