Principles of economics Essay Example | Topics and Well Written Essays - 750 words - 1

Principles of economics - Essay ExampleAccording to the way people invent decisionsPeople face trade-offPeople face trade-off in the economy. A trade-off occurs where adept has to give up something for something else. One can forego a resource so that they can pass it somewhere else (Mankiw, Gregory, 2014). For example, when a student is given upkeep money, they can decide to purchase extra take materials and reduce the amount of snacks they take daily.The price of a good is what you pay to have itTo obtain a product, one must pay for it. The cost that one pays to obtain something and fore go the benefit of the separate is called the opportunity cost. For example, one has to pay fees to spend time to gain knowledge of a particular skill. Therefore, it is eventful to consider the opportunity cost so as to make decision as to whether to undertake an action. In most cases, the chosen course of action has a sink opportunity cost. If the forgone choice has a lower opportunity cost, then there is no economic feasibility. Rational people think at the strandEconomists take it that individuals are rational in decisions, and that they take the best options to achieve their goals, given certain opprotunities.Example, a company may decide to higher highly competent people who will produce a very high output within a shorttime.This will help maximize returns (Mankiw, Gregory, 2014). Individuals react or incentives People, being rational decision makers, would be sensitive to rewards and punishments (Mankiw, Gregory, 2014).