Economic Principles Flashcards
1
Q
Scarcity Forces Trade Offs
A
In response to a lack of resources, people are forced to make decisions.
2
Q
Costs vs. Benefits
A
Making decisions requires comparing the costs and benefits of alternative choices.
3
Q
Thinking on the Margin
A
Most decisions we make involve choices about more or less of something.
4
Q
Incentives Matter
A
People respond to incentives in mostly predictable ways.
5
Q
Trade Makes People Better off
A
By focusing on what we do well and then trading with others we will end up with better choices.
6
Q
Markets Coordinate Trade
A
Markets usually do better than anyone or anything else at the coordinating exchanges between buyers.
