Unformatted text preview: Question 2 1 ’ 1 P‘s Lawrence is a photographer. He has $230 to spend and wants to buy either a
ﬂash for his camera or a new tripod. Both the ﬂash and tripod cost $230. so
he can only buy one. This illustrates the principle that 1. trade can make everyone better off.
2. people face trade-offs. 3. rational people think at the margin.
4. people respond to incentives. trade can make everyone better off.
° people face trade-offs.
rational people think at the margin. people respond to incentives. ...
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- Fall '08
- Economics, Lawrence, Rational people, $230, People Face Trade-offs