Name______block ______

7 Principles of Economics Study Guide

Scarcity Forces Tradeoffs

-Limited resources force people to make choices and face tradeoffs when they choose.

Costs vs. Benefits

-The idea that people choose something when the benefits of doing so outweigh the costs.

Thinking at the Margin“Marginal Analysis”

-when we decide to add or subtract a little to (or from) what we already have

Incentives Matter

-Something that motivates a person to do something.

Trade Makes People Better Off

-We should focus on what we do well, and then trade with others for the other stuff we need/want.

Markets Coordinate Trade

-Any arrangement that brings buyers and sellers together to do business with each other.

Future Consequences Count

-Decisions made today have consequences not only for today, but also for the future.

Directions: Write the principle that BEST fits the example.

Scarcity Forces Tradeoffs Costs vs. Benefits Thinking at the Margin

Markets Coordinate Trade Incentives Matter

Future Consequences Count Trade Makes People Better Off

  1. You are at the movies and wonder if you should buy some popcorn?

Thinking at the Margin

  1. The Spartmart sells things that students and staff buy at Broad Run High School.

Markets Coordinate Trade

  1. You fail to prepare for the SAT examination and get a low score. The college you want to get into requires a certain SAT score.

Future Consequences Count

  1. You can either study for your test tomorrow or watch the big game.

Scarcity Forces Tradeoffs

  1. You need help on in chemistry class and can get free tutoring by an NHS tutor. They need a certain number of volunteer hours of service for NHS club.

Trade Makes People Better Off

  1. You are deciding whether or not if you can afford to buy the new iPhone X.

Costs vs. Benefits

  1. You are taking Economics to be able to get your high school diploma.

Incentives Matter