3.Rational people think at the margin. Marginal changes are small,incremental adjustments to an existing plan of action. People make decisions by comparing costs and benefits at the margin
3. Rational people think at the margin. Marginal changes are small, incremental adjustments to an existing plan of action. People make decisions by comparing costs and benefits at the margin
People respond to incentives. - Marginal changes in costs or benefits motivate people to respond. The decision to choose one alternative over another occurs when that alternative's marginal benefits exceed its marginal costs!
4. People respond to incentives. Marginal changes in costs or benefits motivate people to respond. The decision to choose one alternative over another occurs when that alternative’s marginal benefits exceed its marginal costs!
4.People respond to incentives. LA Laker basketball star Kobe Bryant chose to .skip-college and go straight to the NBA from high school when offered a $10 million contract
LA Laker basketball star Kobe Bryant chose to skip college and go straight to the NBA from high school when offered a $10 million contract. 4. People respond to incentives
5.Trade can make everyone better off. People gain from their ability to trade with one another. Competition results in gains from trading. Trade allows people to specialize in what they do best
5. Trade can make everyone better off. People gain from their ability to trade with one another. Competition results in gains from trading. Trade allows people to specialize in what they do best
6.Markets are usually a good way to organize economic activity.-+- In a market economy,households decide what to buy and who to work for. Firms decide who to hire and what to produce
6. Markets are usually a good way to organize economic activity. In a market economy, households decide what to buy and who to work for. Firms decide who to hire and what to produce