Six Core Economic Principles - The 6 Core Economic Principles 1 People Choose We always want more than we can get and productive resources(human natural

Six Core Economic Principles - The 6 Core Economic...

This preview shows page 1 out of 1 page.

586 The 6 Core Economic Principles 1. People Choose : We always want more than we can get and productive resources (human, natural, capital) are always limited. Therefore, because of this major economic problem of scarcity , we usually choose the alternative that provides the most benefits with the least cost. 2. All Choices Involve Costs : The opportunity cost is the next best alternative you give up when you make a choice. When we choose one thing, we refuse something else at the same time. 3. People Respond to Incentives in Predictable Ways : Incentives are actions, awards, or rewards that determine the choices people make. Incentives can be positive or negative . When incentives change, people change their behaviors in predictable ways. 4. Economic Systems Influence Individual Choices and Incentives : People cooperate and govern their actions through both written and unwritten rules that determine methods of allocating scarce resources. These rules determine what is produced, how it is produced, and for whom it is produced. As the rules change, so
Image of page 1

You've reached the end of your free preview.

Want to read the whole page?

  • Spring '12
  • Harry
  • Economics, Intermediate School District, Muskegon Area Intermediate School District, Muskegon Area Intermediate, Area Intermediate School, Choices Involve Costs

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture

Stuck? We have tutors online 24/7 who can help you get unstuck.
A+ icon
Ask Expert Tutors You can ask You can ask You can ask (will expire )
Answers in as fast as 15 minutes