Seven Principles of Economics

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

• Costs versus Benefits

• Thinking at the margin

• Incentives Matter

• Future Consequences Count

Amateur investors banded together this week to squeeze Wall Street hedge funds by sending GameStop’s stock prices to dizzying heights.

• Costs vs Benefits

• Trade Makes People Better Off

• Future Consequences Count

• Markets Coordinate Trade

A lot of mothers cannot afford to stay home with their children because they have to work to help pay for costs of living, the choice they make to go to work forces them to give up time and nurturing of their children.

• Thinking at the Margin

• Costs vs Benefits

• Scarcity Forces Tradeoffs

• Future Consequences Count

Which of the following best describes a tradeoff?

• Gaining without losing

• Losing without gaining

• Giving up one thing to get another

• Getting everything without giving up anything

The study of how people use resources to fulfill unlimited needs and wants is

(a)  

What is the significance of the phrase "There Ain’t No Such Thing As A Free Lunch"?

• It means that some choices are free

• It means that every choice requires tradeoffs

• It means that free lunches are available

• It means that tradeoffs are not necessary

In the costs versus benefits principle, what do people consider when making a choice?

• Only the costs

• Only the benefits

• Both the costs and benefits

• Neither the costs nor the benefits

What does the phrase "There Ain’t No Such Thing As A Free Lunch" suggest about economic choices?

• Economic choices are free of cost

• Economic choices involve no tradeoffs

• Economic choices always involve tradeoffs

• Economic choices are unlimited

A family consumes more goods and services by specializing in the production of only one good

• Principle 3: Rational people think at the margin

• Principle 5: Trade can make everyone better off

• Principle 1: People face tradeoffs

• Principle 9: Prices rise when the government prints too much money

Bill buys a home because he is confident that he is protected by property rights laws

• Principle 7: governments can sometimes improve market outcomes

• Principle 10: Society faces a short-run tradeoff between inflation and unemployment

• Principle 1: People face tradeoffs

• Principle 4: People face incentives