10 principles of Economics
1. People face trade-offs. After reading about the first principle I
understood that people always have to choose between something.
We need to understand that during the time when we must choose
between two or more things, we can choose the best option. In my
opinion people should choose a way that will benefit in the future.
2. The cost of something is what you give up to get it. You have to
pay for any pleasure. And I absolutely agree with it. Because when
you make a decision for some action you inevitable lose
opportunity of another option.
3. Rational people think at the margin. Everyone knows that a
rational people do everything purposefully and no other way. It
follows that they make decisions by comparing costs and benefits at
the margin. I think it is the right move. Therefore between two
favorable offers the right thing to do is pick what you are more
certain of.
4. People respond to incentives. Incentive is like an external factor
that can affect a person. Because of some incentives a person can
easily change his or her decision. It depends on the situation. But in
many cases incentives inspire and make us not give up in difficult
situations. That`s why people make decisions by comparing
benefits and costs, responding to incentives.
5. Trade can make everyone better off. In this case, the most
important thing is to find the case where you’re perfect and you can
do it better than anyone. You could ask why. Because if you are
good at something, it is nice developing your skills and sharing
own experience and knowledge with others.
6. Markets are usually a good way to organize economic activity.
Firms decide who to hire and what to produce. And when we start
saying about market, we should understand that households and
firms are related. Because both of them look at prices when
deciding what to buy and sell, each of them primarily concerned
with personal gain. Also state control over prices is very harmful.
