University of Phoenix
Principles of Economics
Evanthis (Pete) Mavrokordatos
Everyday patrons often make amazingly difficult economic choices in their everyday life, however it has come to terms that is at the present time a large amount of data that support the fact that many times, consumers have are quite badly educated as they make various important financial decisions. In the following paragraphs, this essay inquires into further the questions of who is economically educated by explaining the four principles of individual decision making, an example of a decision I had to made by comparing marginal benefits to marginal costs, also how were the marginal benefits a key point in my decision making, were their incentives that might have made my decision different?
The principles of economics influence your decision-making, interaction with others, and the economy as a whole. The first lesson when discussing decision making is reviewing the saying “Nothing in life comes easy.” In order to get something we want, we will have to give up something else. (Mankinw, 2007). The second principle is the cost of something is what you give up to get it. Making decisions involves exchanging one desire for the chance at another desire. Because many of us have to face trade-offs every now and again, making choices
involve evaluating the expenses and payback of optional course of action. Enough times out of many, however, the price of various actions might not be as apparent as first appeared. (Mankinw, 2007). The third principle is rational people think at the margin; economists usually suppose that society is rational. Rational people logically and determinedly work hard to accomplish objectives set before them; given the chances they are set before them. Rational people recognize that choices in everyday life are hardly ever black and white but regularly involve shades of gray. Rational individuals frequently formulate...