Ten Principles of Economics How the economy as a Whole works 8. The standard of living depends on a country's production 9. Prices rise when the government prints too much money 10. Society faces a short-run tradeoff between inflation and unemployment
Harcourt, Inc. items and derived items copyright © 2001 by Harcourt, Inc. Ten Principles of Economics How the Economy as a Whole Works 8. The standard of living depends on a country’s production. 9. Prices rise when the government prints too much money. 10. Society faces a short-run tradeoff between inflation and unemployment
1. People face tradeoffs sThere is no such thing as a free lunch!
Harcourt, Inc. items and derived items copyright © 2001 by Harcourt, Inc. 1. People face tradeoffs. “There is no such thing as a free lunch!
1. People face tradeoffs To get one thing, we usually have to give up another thing. ◆ Guns y.butr ◆ Food v. clothing ◆ Leisure time.Work ◆ Efficiency v. equity Making decisions requires trading off one goal against another
Harcourt, Inc. items and derived items copyright © 2001 by Harcourt, Inc. 1. People face tradeoffs. To get one thing, we usually have to give up another thing. Guns v. butter Food v. clothing Leisure time v. work Efficiency v. equity Making decisions requires trading off one goal against another
1. People face tradeoffs Efficiency v. Equity Efficiency means society gets the most that it can from its scarce resources o Equity means the benefits of those resources are distributed fairly among the members of society
Harcourt, Inc. items and derived items copyright © 2001 by Harcourt, Inc. 1. People face tradeoffs. Efficiency v. Equity Efficiency means society gets the most that it can from its scarce resources. Equity means the benefits of those resources are distributed fairly among the members of society
2. The cost of something is what you give up to get it Decisions require comparing costs and benefits of alternatives o Whether to go to college or to work? o Whether to study or go out on a date o Whether to go to class or sleep in?
Harcourt, Inc. items and derived items copyright © 2001 by Harcourt, Inc. 2. The cost of something is what you give up to get it. Decisions require comparing costs and benefits of alternatives. Whether to go to college or to work? Whether to study or go out on a date? Whether to go to class or sleep in?