Class Notes The Handy Dandy Guide People choose All choices involve costs People respond to incentives in predictable ways People create economic systems that influence choices and incentives ID: 441610
Download Presentation The PPT/PDF document "The Economic Way of Thinking" is the property of its rightful owner. Permission is granted to download and print the materials on this web site for personal, non-commercial use only, and to display it on your personal computer provided you do not modify the materials and that you retain all copyright notices contained in the materials. By downloading content from our website, you accept the terms of this agreement.
Slide1
The Economic Way of ThinkingSlide2
Class Notes: The Handy Dandy Guide
People choose.
All choices involve costs.
People respond to incentives in predictable ways.
People create economic systems that influence choices and incentives.People gain when the trade voluntarily.People’s choices have consequences for the future.Slide3
What is an opportunity cost?
It is the best alternative that a person gives up to get something. The opportunity cost is the next-best option to the one actually chosen.Slide4
Why is opportunity cost important when you make choices?
Everything has a cost. By considering costs, you make better economic decisions.Slide5
Why do people want to be wealthy?
To buy more goods and services,
to gain more freedom of choice,
to gain economic security,
to enjoy a more satisfying life, to use wealth in helping others.Slide6
Why do the choices we make now matter in the future?
Taking advantage of current economic opportunities can improve your life. Choices you make now can increase or decrease your future wealth.
Because we don’t want to end up like this!Slide7
What incentives encourage people to save money?
Earing interest,
Providing for future needs.Slide8
Why are the Robinsons wealthier than the Murrays?
They made better decisions regarding the accumulation of wealth.Slide9
Class Notes: Five-Step Decision-Making Process
Define the Problem.
List Your Alternatives.
State Your Criteria.
Evaluate Your Alternatives.Make a Decision.