7 Principles of Economic Thinking

the study of how people make decisions to satisfy their needs and wants

• goods
• resources
• economics
• scarcity

An incentive is:

• the option to select or make a decision when faced with two or more possibilities
• a conclusion or resolution reached after consideration
• a circumstance that contributes to a result or outcome
• a benefit or cost that influences a person's decision

Which of the following statements is true: 

• An economist would consider something scarce only if it is limited (not anything else) 
• A trade off occurs when you give up something you want in order to get something else you want 
• The economic social goal, economic equity, means everyone gets the same amount of money 
• In a traditional economy, the government gets to decide the answers to the 3 basic economic questions

Economics is the study of how people satisfy their ______ and ______.

• wants; thoughts
• thoughts; desires
• wants; needs
• rent; utilities

The act of giving up one benefit in order to gain another, greater benefit.

• "guns or butter"
• trade-off
• opportunity cost
• thinking at the margin

I only have an hour of free time today. If I study, I can't see my friends.

• Costs versus Benefits
• Scarcity Forces Tradeoffs
• Incentives Matter
• Future Consequences Count

I thought it was a good idea to get a dog. I didn't know it would drive my neighbors crazy.

• Costs versus Benefits
• Scarcity Forces Tradeoffs
• Incentives Matter
• Future Consequences Count
  

I already ate 5 slices of pizza. Should I eat one more?

• Scarcity Forces Tradeoffs
• Incentives Matter
• Markets Coordinate Trade
• Thinking at the Margin
  

I want to sell my paintings. Maybe I'll post them on eBay.

• Costs vs Benefits
• Trade Makes People Better Off 
• Future Consequences Count
• Markets Coordinate Trade
  

I only have 20 dollars. If I spend it on a steak dinner, I can't buy gas for my car.

• Thinking at the Margin

• Costs vs Benefits

• Scarcity Forces Tradeoffs

• Future Consequences Count