Six Key Economic Principles:
The Handy Dandy Guide
• 1. People choose.
• 2. People’s choices involve costs.
•
Key idea: Opportunity cost
• 3. People respond to incentives in
predictable ways.
Six Key Economic Principles:
The Handy Dandy Guide
• 4. People create economic
systems that influence
individual choices and
incentives
• 5. People gain when they trade
voluntarily.
Six Key Economic Principles:
The Handy Dandy Guide
• 6. People’s choices have
consequences that lie in the
future.
• Exercise: applying the HDG
Why would people who sell cars
not want to sell them on Sunday?
• http://classtools.net/education-gamesphp/timer
Scarcity and Opportunity Cost
• Two definitions of scarcity:
• 1. A situation in which human
wants are greater than the
capacity of available resources
to provide for those wants.
• 2. A situation in which a resource
has more than one valuable
use.