Principles of Economics

From Wikiversity

Economics is the study of the allocation of scarce resources.

To study economics you must first understand that your are not studying money, rather you are studying choices and how each individual chooses one from the other.

Gregory Mankiw in his Principles of Economics outlines Ten Principles of Economics that we will replicate here, they are:

HOW PEOPLE MAKE DECISIONS 1) People face tradeoffs -

2) The Cost of Something Is What you give up to get it

3) Rational people think at the Margin

4) People respond to Incentives

HOW PEOPLE INTERACT 5) Trade can make everyone better off

6) Markets are usually a good way to organize economic activity

7) Governments can sometimes improve market outcomes

HOW THE ECONOMY AS A WHOLE WORKS

8) A country's standard of living depends on its ability to produce goods and services

9) Prices rise when the government prints too much money

10) Society faces a short-run tradeoff between Inflation and Unemployment