Ten laws of economics

Answer 1

1. People face trade offs (opportunity costs).

2. The opportunity cost of something is what you give up to get it.

3. Rational people think in the margins (incremental changes).

4. People respond to incentives.

5. Trade can make everyone better off.

6. Marketplaces are usually a good way to organize economic activities.

7. Governments can sometimes improve a marketplace. (think property rights)

8. A country's standard of living is entirely dependent upon it's ability to produce goods and services for exchange in a marketplace.

9. Prices rise when governments print excessive amounts of currency.

10. Society faces a short-term trade off between inflation and unemployment.