1. Resources are scarce.
2. The real cost of something is what you must give up to get it.
3. “How much?” is a decision at the margin.
4. People usually take advantage of opportunities to make themselves better off.
1. There are gains from trade.
2. Markets move toward equilibrium.
3. Resources should be used as efficiently as possible to achieve society’s goals.
4. Markets usually lead to efficiency.
5. When markets don’tachieve efficiency, government intervention can improve society’s welfare.
1. One person’s spending is another person’s income.
2. Overall spending sometimes gets out of line with the economy’s productive capacity.
3. Government policies can change spending.
Thereare two main reasons economists disagree:
Whichsimplifications to make in a model
the demand curve is __________ sloping
the demand curve is downward sloping
A movement along the demand curve is a change in...