Ten Principles of Economics

Ten Principles of Economics - Ten Principles of Economics...

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Ten Principles of Economics Need people to produce Scarcity The limited nature of society’s resources Economics The study of how society manages its scare resources Study how people interact with each other How People Make Decisions People Face Trade-offs Guns and butter There aint no such thing as a free lunch To get one thing we like we have to give up another Trade Off between Efficiency and Equality Efficiency Society is getting its maximum benefits from its scarce resources Equality The property of distributing economic prosperity uniformly among the members of society Greater equality = lesser efficiency Example: robin hood effect Taking money from the rich to give to the poor People don’t work as had Producing fewer goods Cutting into more pieces making smaller Pie
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Size-efficiency Divided- equality The Cost of Something is What You Give Up To Get It Opportunity cost Whatever must be given up to obtain some item Rational People Think At The Margin Rational people People who systematically and purposefully do the best they can to achieve their
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Ten Principles of Economics - Ten Principles of Economics...

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