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Chapter 1- 7 Principles Of Economics With Complete Solutions Latest Update
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Chapter 1- 7 Principles Of Economics WithComplete Solutions Latest Update
Economics - correct answers social science that studies human behavior and how people change/ the study of
how society manages the scarce resources
Resources are scarce... unlimited desires but limited resources - correct answers The fundamental economic
problem
How people make decision - correct answers Principles 1-4
How people interact - correct answers Principles 5-7
Principle 1 - correct answers People face tradeoffs. All decisions involve tradeoffs (studying vs. sleeping) (work
more vs. leisure time)
Tradeoffs - correct answers exchange of something for something else
Principle 2 - correct answers the cost of something is what you give up to get it (money, time, and opportunity
cost). All choices have a cost associated with them.
opportunity cost - correct answers whatever must be given up to obtain it. What you would have gotten if
you'd done the other thing: the thing you didn't do. The relevant cost for decision making
Principle 3 - correct answers Rational people think at the margin. Going on path and smaller little decisions on
the side.. People do whats best for them
Rational people - correct answers systematically and purposefully do the best they can to achieve their
objectives, economic rationality
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