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LU 1: Introduction (Principle 1: People Face Trade-offs (Efficiency,…
LU 1: Introduction
Principle 1: People Face Trade-offs
Efficiency
Equity
Absolute Advantage
Productivity
Principle 4: People Respond to Incentives
Comparative Advantage
Costs of production
Principle 5: Trade Can Make Everyone Better Off
Principle 3: Rational People Think at the Margin
Principle 2: The Cost of Something is What You Give Up to Get it
Opportunity Cost
Principle 6: Markets Are Usually a Good Way to Organize Economic Activity
Market is being controlled by an "Invisible Hand"
Principle 7: Governments Can Sometimes Improve Market Outcomes
Principle 8: A Country's Standard of Living Depends on Its Ability to Produce Goods and Services
Comparing personal incomes
Comparing total market value of a nation's production
Principle 10: Society Faces a SHort-run Trade-off between Inflation and Unemployment
Economic Models
CIrcular Flow DIagram
Markets for Goods and Services
Firms sell
Households buy
Markets for Factors of Production
Households sell
Firms buy
Production Possibilities Frontier
Efficiency
Opportunity cost
Trade-offs
Economics growth
Principle 9: Prices Rise When the Government Prints Too Much Money
Inflation