Economics Final Study Guide

Economics Final Study Guide - 8. Standard of Living depends...

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Economics Final Study Guide: Chapter 1- Economics is about the allocation of scarce resources Individuals face trade-offs Opportunity Cost: 1. Whatever must be given up to obtain some item Ten Principles of Economics: 1. People face tradeoffs. 2. The cost of something is what you give up to get it. (Opportunity Cost) 3. Rational people think at the margin. 4. People respond to incentives 5. Trade can make everything better off. 6. Markets are usually a good way to organize 7. Government can sometimes improve market outcomes
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Unformatted text preview: 8. Standard of Living depends 9. Prices rise when the government prints too much money (inflation) 10. The Phillips curve (society faces a short run trade off between inflation and unemployment). Chapter 2- Microeconomics- Study of the individual Macroeconomics- Study of the whole. Positive Statements- What is Normative- What ought to be Economist as a scientist o Economist as a policy advisor o Chapter 3-o...
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