ECON 2000 Chapter : Econ SI Chapter 1
Document Summary
How households and firms make decisions and how they interact in markets. Whatever to be given up to obtain the item. What happens to a third party; the impact of one persons actions on the well-being of a bystander. An increase on the overall level of prices in the economy. Activity 1: discuss the following economic principles with your group and take notes on the key points discussed. 10 principles of economics: people face trade-offs. Individuals: spending family income, spending time, society. Equality: guns vs butter national defense and consumer goods, the cost of something is what you give up to get it. What must be given to obtain the item i. e. cost of going to college example (cost: books, room and board (that you wouldn"t already spend), time, lost wage benefit: intellect/education: rational people think at the margin. Small incremental adjustments to a plan of action (cost/benefit)
