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Lecture

Ten Principles Of Economics.docx

2 Pages
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Department
Economics
Course Code
ECON 1BB3
Professor
Bridget O' Shaughnessy

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Description
Ten Principles Of Economics How People Make Decisions 1. People face tradeoffs 2. The cost of something is what you give up to get it Opportunity Cost- what you would be doing if you were not here 3. Rational people think at the margin How people should think about decisions as they face them The next/additional step We want to be forward looking and we want to weigh the costs and benefits We want to consider only additional costs, but we want to consider all costs and all benefits (example- going to McMaster for a year, then considering year two costs: time, money, do not earn the full degree benefits: degree, a full education 4. People respond to incentives How People Interact 5. Trade can make everyone better of (change can to will)  International trade  Most economists think that free trade between countries is a good thing, whereas some people disagree  Not everyone is better off; people lose their jobs  If I add up the dollars, the benefits to the country as a whole has increased 6. Markets tend to increase efficiency Efficiency- how much stuff we can make If we are more efficient we can utilize resources to make more stuff Markets compared with “cen
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