Mankew’s 10 Principles of Economics

Md. Imran BhuiyanId. No. Ev-1509050

Tradeoff

Making decisions requires trading off one goal against another

Opportunity Cost

The Cost of Something is What You Give Up to Get It

Rational People think at the

Margin

Less Benefit

More Benefit

Rational People

Marginal benefit of the action exceeds the marginal cost.

People respond to Incentives

Behavior changes when costs or benefits change.

Trade can make Every one better off

By trading with others, people can buy a greater variety of goods or services.

Markets are usually a good way to organize Economic Activities

Market

Invisible hand leads the market to allocate resources efficiently

Government can sometimes improveMarket Outcomes

GOVT.

Government sets regulations against monopolies and pollution.

A country’s Standard of Living depends on it’s Ability to

produce Goods and Services

As a nation's productivity grows, so does its average income.

Prices rise when Government prints too

much Money

Printing too much money requires more of the same money to buy goods and services.

Society faces a short run Trade-off between

Inflation and Unemployment

Reducing inflation often causes a temporary rise in unemployment.