- People face trade-offs.
- The cost of something is what you give up to get it.
- Rational people consider marginal quantities.
- People react to incentives as they trade with each other.
- Trade can make everyone better off.
- The market is usually a good way to organize economic activity.
- Government can sometimes improve market outcomes and how the entire economy runs.
- A country’s standard of living depends on its ability to produce goods and services.
- When the government issues too much currency, prices rise.
- Society faces the short-run trade-off between inflation and unemployment.