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Economyweek1 - Title Page Economic decisions are more...

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Economic decisions are more difficult today than they were many years ago. Making economic decisions is more difficult when you’re making purchases as large as a car and as small as groceries. You need to take many things into consideration before buying either item. What will happen if I buy this car? Am I going to lose my job soon? Will I be able to afford these payments? Do we really need this snack food? There are four different principles in decision making. I will explain these four principles and incorporate a personal decision I have to make by using these four principles. The principles are as follows, People face trade-offs, the cost of something is what you give up to get it, Rational people think at the margin, and finally people respond to incentives. “There is no such thing as a free lunch.” To get one thing that we like, we usually have to give up another thing that we like. Making decisions requires trading off one goal against another.(Book) That brief explanation talks about how sometimes in our lives people indeed face
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