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10 Cards in this Set
- Front
- Back
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1 |
People face tradeoffs |
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2 |
The true cost of anything includes all that is given up in order to obtain it.
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3 |
Rational people think at the margin which means that people will act in their best perceived interest. *Paperclip in outlet example (Think at the margin- Moment by moment/cost vs. benefit) |
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People respond to incentives *Incentive- prospect of future reward or punishment that induces certain behavior |
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Trade makes people better off (Graphed as a simple graph with consumer surplus on top and producer surplus on bottom) |
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Markets are the best way to organize economic activity (Graphed as a price floor or price ceiling) |
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7 |
Governments can sometimes improve economic outcomes |
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8 |
A nations standard of living depends on its ability to produce goods and services |
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9 |
Prices rise when governments print too much money (Graph the inflation *Move the Supply line to the right) |
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10 |
Society faces a short run tradeoff between inflation and unemployment (Graph the business cycle *Real gdp x time* ) |
