10 Questions
What principle states that people make choices based on comparing expected costs and benefits?
Costs Versus Benefits Principle
Which principle involves making decisions based on a small incremental change in an existing plan or activity?
Thinking at the Margin
What does the No-Free-Lunch Principle observe about every choice?
It involves tradeoffs
What is the additional gain or satisfaction obtained by consuming or producing one more unit of a good or service called?
Marginal Benefits
Which principle states that people respond to rewards and penalties in predictable ways, influencing their behavior and decision-making?
Incentives Matter
What does trade with others lead to, according to the principle mentioned in the text?
Mutual benefit
Which metaphor is used by Adam Smith to explain how self-interested individuals promote the well-being of society through market transactions?
Invisible Hand
What do limited resources force individuals to do?
Make choices and face tradeoffs
What is the observation that every choice involves tradeoffs referred to as?
No-Free-Lunch Principle
What does making decisions involving a small incremental change in an existing plan or activity consider?
Thinking at the Margin
Explore the principles related to scarcity and tradeoffs, including the no-free-lunch principle, costs versus benefits, and thinking at the margin. Understand how limited resources lead to choices and prioritization of needs and wants.
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