week9 10 principlesofeconomics
Ch. 1 of Mankiw’s 10 Principles of Economics
Ch. 1 of Mankiw’s 10 Principles of Economics
Brooke Settles
7/29/14
Principle 1: People Face Trade-Offs: Having more money to buy stuff requires working longer hours which leaves less time for family and friends.
Principle 2: The cost of something is what you give up to get: I gave up fulltime employment wages to continue my education.
Principle 3: Rational people think at the margin: People are willing to pay more for an item because of the benefits of owning the item because the marginal benefits outweigh the marginal cost.
Principle 4: People respond to incentives: People respond better to incentives for example; items on sale, versus items sold at the regular price.
Principle 5: Trade can make everyone better off: Trade between two or more countries that produce similar goods can benefit from the variety of goods.
Principle 6: Markets are usually a good way to organize Economic Activity: Trading markets are organized so it makes it easier to economically analysis the activities in the markets.
Principle 7: Government can sometimes improve market outcome: The government’s involvement in the market outcomes can improve or ensure market equilibrium.
Principle 8: A country’s standard of living depends on its ability to produce goods and services: The standard of living is based on a country’s productivity of goods and services. Without productivity a country’s standard of living is lower because of the lack of revenue.
Principle 9: Prices rise when the government prints too much money: Inflation or recession is caused by increased money disbursement by the government, which decreases the value of money.
Principle 10: Society faces a short-run trade-off between inflation and unemployment: An increase in government spending will increase spending, supply and demand, which will increase jobs.
How do you intend to use your newfound knowledge in future economic decisions?
Ch. 1 of Mankiw’s 10 Principles of Economics
Brooke Settles
7/29/14
Principle 1: People Face Trade-Offs: Having more money to buy stuff requires working longer hours which leaves less time for family and friends.
Principle 2: The cost of something is what you give up to get: I gave up fulltime employment wages to continue my education.
Principle 3: Rational people think at the margin: People are willing to pay more for an item because of the benefits of owning the item because the marginal benefits outweigh the marginal cost.
Principle 4: People respond to incentives: People respond better to incentives for example; items on sale, versus items sold at the regular price.
Principle 5: Trade can make everyone better off: Trade between two or more countries that produce similar goods can benefit from the variety of goods.
Principle 6: Markets are usually a good way to organize Economic Activity: Trading markets are organized so it makes it easier to economically analysis the activities in the markets.
Principle 7: Government can sometimes improve market outcome: The government’s involvement in the market outcomes can improve or ensure market equilibrium.
Principle 8: A country’s standard of living depends on its ability to produce goods and services: The standard of living is based on a country’s productivity of goods and services. Without productivity a country’s standard of living is lower because of the lack of revenue.
Principle 9: Prices rise when the government prints too much money: Inflation or recession is caused by increased money disbursement by the government, which decreases the value of money.
Principle 10: Society faces a short-run trade-off between inflation and unemployment: An increase in government spending will increase spending, supply and demand, which will increase jobs.
How do you intend to use your newfound knowledge in future economic decisions?
References: Principles of Economics, Ch. 1 [Figures – note that this page does not have the manuscript header and page number]