Economy. - .: Ten Principles of Economics
Economy. - .: Ten Principles of Economics
Economy. - .: Ten Principles of Economics
INTRODUCTION
Economy. . .
. . . The word economy comes from a Greek
word for one who manages a household.
Ten Principles of
Economics
TEN PRINCIPLES OF
ECONOMICS
A household and an economy
face many decisions:
TEN PRINCIPLES OF
ECONOMICS
Society and Scarce Resources:
TEN PRINCIPLES OF
ECONOMICS
Economics is the study of how society manages
its scarce resources.
TEN PRINCIPLES OF
ECONOMICS
How people make decisions.
TEN PRINCIPLES OF
ECONOMICS
How people interact with each other.
Trade can make everyone better off.
Markets are usually a good way to organize
economic activity.
Governments can sometimes improve economic
outcomes.
TEN PRINCIPLES OF
ECONOMICS
The forces and trends that affect how the
economy as a whole works.
The standard of living depends on a countrys
production.
Prices rise when the government prints too much
money.
Society faces a short-run tradeoff between inflation
and unemployment.
Guns v. butter
Food v. clothing
g
Leisure time v. work
Efficiency v. equity
Summary
When individuals make decisions, they face
tradeoffs among alternative goals.
The cost of any action is measured in terms of
foregone opportunities.
Rational people make decisions by comparing
marginal costs and marginal benefits.
People change their behavior in response to the
incentives they face.
Summary
Summary