1. People face trade-offs
2. The cost of something is what you give up to get it.
3. Rational people think at the margin
4. People respond to incentives
Princples Concerning people's economic interactions
1. Trade makes everyone better off
2. Markets are usually a good way to organize the economy
3. Governments can sometimes improve market outcomes
1. A country's standard of living depends on its ability to produce goods and services.
2. How the ecomoy works is prices rise when government prints too much money.
3. Society faces a short-run trade off between inflation and unemployment.
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