Question

How are the tenn priciples of economics applied in daily life?

Answer 1

Gregory Mankiw in his Principles of Economics outlines Ten Principles of Economics that we will replicate here, they are:

People face trade-offs

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

Rational people think at the margin

People respond to incentives

Trade can make everyone better off

Markets are usually a good way to organize economic activity

Governments can sometimes improve market outcomes

A country's standard of living depends on its ability to produce goods and services

Prices rise when the government prints too much money

Society faces a short-run tradeoff between Inflation and unemployment.