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Principles of Economics Matching Exercise

Each scenario below practices one of the 10 principles of economics.  Match the principles to the appropriate scenario listed and justify your answer.  Each principle will only be used once.

 

Principles:

 

               1.     People face tradeoffs.

               2.    The cost of something is what you give up to get it.

               3.    Rational people think at the margin.

               4.    People respond to incentives.

               5.    Trade can make everyone better off.

               6.    Markets are usually a good way to organize economic activity.

               7.    Governments can sometimes improve market outcomes.

               8.    A country’s standard of living depends on its ability to produce goods and services.

               9.    Prices rise when the government prints too much money.

             10.  Society faces a short-run tradeoff between inflation and unemployment.

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