Question

Identify the fundamental lessons the ten principles of economics teach about: how people make decisions how people interact how the economy as a whole works

Answer 1

The 10 principles of Economics are outlined by Gregory Mankiw in his Principles of Economics. The principles can be categorized in three groups depending on their discussion of the economy. The first group (or category) gives answer of the question How people make decision?(Rational people think at the margin;People respond to incentives, the second How people interact?(People face trade-offs; The cost of something is what you give up to get it) and the third How the economy as a whole works (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 trade-off between Inflation and unemployment.?)