10 Principles of Economics

What is the fundamental lesson of economics according to the provided notes?

Individual decision making.

What is the first principle of economics?

People face trade-offs.

Fill in the Blank: The cost of something is what you give up to __________.

Get it.

What does it mean when we say 'Rational people think at the margin'?

Rational people make decisions based on the additional benefit of an action compared to its additional cost.

What principle explains that people change their behavior in response to changes in incentives?

People respond to incentives.

Define 'trade-offs' in the context of economics.

The alternative choices that must be given up when making a decision.

How does the concept of opportunity cost relate to trade-offs?

Opportunity cost is the value of the next best alternative that is forgone when a choice is made.