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The principles of economics - Coggle Diagram
The principles of economics
The cost of something is what you giveup to get it.
The Cost of Something is What You
Give Up to Get it
• The opportunit
cost of an item is what you
give up to obtain that item
• The oppontunity of any decision is the value
of the redecision forces the decision maker to forgoo
Rational People Think at the Margin
• Weighting up the cost and benefit t
• One does this when choosina
and what to produce, or whether to take a
particular job, to work extra hours, or what
to consume.
People Face Trade-offs
scarce resources are used up in production
and there is an opportunity cost involved.
• compare two things that you have to do or
buy based on the resouces you have.
Trade Can Make Everyone Better Off
People gain from their ability to wade with
one another
• Trade allows people to specialize in what
they do Best.
Market Outcomes
• A country s standard of firing depends on
its ability to produce goods and services
Pnces rise when the povemment ports 100
much monev
Society faces a short.run trade off y
inflation and unemployment
Governments Can Sometimes Improve
Markets Are Usually a Good Wat
Organize Economic Activity,
• A market economy is an economy that
allocates resources through the
decentralized decisions of mar firms and
households as they intreract