Principle 1: People face trade offs

Explanation
The principle states that individuals are confronted with trade-offs. This means
that when making decisions or choices, people often have to give up one thing
in order to gain another. In other words, individuals cannot have everything
they want and must make choices based on their priorities and the limited
resources available to them. This principle recognizes the reality that
individuals have to make sacrifices and prioritize their needs and wants in order
to make the best possible decisions.
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 2.
Principle 2: The cost of something is what you ______ ____ to get
it.
Explanation
This principle states that the cost of something is determined by what you have
to sacrifice or give up in order to obtain it. In other words, the true cost of
something is not just its monetary value, but also the resources, time, or
opportunities that you have to forgo in order to acquire it. This principle
emphasizes the importance of considering all the factors involved in a decision,
rather than just focusing on the immediate price tag.
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 3.
Principle 3: Rational people think at the ________.
Explanation
Rational people think at the margin means that they consider the additional or
incremental benefits and costs of a decision. They analyze the extra benefit
they will receive from a particular choice compared to the extra cost they will
incur. This principle suggests that rational decision-making involves weighing
the pros and cons of each option and choosing the one that provides the greatest
 net benefit. By thinking at the margin, individuals can make more informed and
efficient decisions.
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 4.
Principle 5: Trade can make ________ better off.
Explanation
Trade can make everyone better off because it allows individuals and countries
to specialize in producing goods and services that they have a comparative
advantage in. This leads to increased efficiency and productivity, as resources
are allocated more effectively. Through trade, individuals can access a wider
variety of goods and services at lower prices, improving their overall well-
being. Additionally, trade promotes economic growth by fostering competition,
innovation, and the transfer of knowledge and technology. Ultimately, trade
benefits all parties involved by creating opportunities for mutually beneficial
exchanges and promoting overall prosperity.
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 5.
Principle 6: Markets are usually a good way to organize ________
_________.
Explanation
Markets are usually a good way to organize economic activity because they
provide a platform for buyers and sellers to interact and exchange goods and
services. Through the mechanism of supply and demand, markets allocate
resources efficiently, determine prices, and promote competition. This allows
for the efficient allocation of resources, encourages innovation and
entrepreneurship, and ultimately leads to economic growth and prosperity.
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 6.
Principle 7: Governments can sometimes ________ market
outcomes.
 Explanation
According to Principle 7, governments have the ability to improve market
outcomes. This means that they can intervene in the market to make it function
better or more efficiently. This can be done through various means such as
implementing regulations, providing public goods, correcting market failures,
and promoting competition. By doing so, governments can enhance the overall
performance and effectiveness of the market, leading to better outcomes for
consumers and society as a whole.
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 7.
Principal 8: A country's standard of living depends on its ability to
________ _______ ___ _________.
Explanation
A country's standard of living depends on its ability to produce goods and
services. This is because the production of goods and services leads to
economic growth and development, which in turn improves the overall quality
of life for the country's citizens. When a country can effectively produce goods
and services, it can generate income, create jobs, and provide essential goods
and services to meet the needs of its population. This ultimately contributes to
higher standards of living, as individuals have access to better healthcare,
education, infrastructure, and other necessities for a comfortable life.
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 8.
Principal 9: Prices _____ when the government prints too much
money.
Explanation
When the government prints too much money, it leads to an increase in the
money supply in the economy. This increase in the money supply causes
inflation, which is a general rise in prices. Therefore, the correct answer is
"rise".
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 9.
Principal 10: Society faces a short-run trade-off between
__________ and unemployment.
Explanation
Society faces a short-run trade-off between inflation and unemployment. This
means that when inflation is low, unemployment tends to be high and vice
versa. This trade-off is known as the Phillips curve, which suggests that there is
an inverse relationship between inflation and unemployment in the short run.
When the economy is growing rapidly and demand for goods and services is
high, inflation tends to rise while unemployment falls. Conversely, during a
recession, inflation tends to be low while unemployment rises. This trade-off
highlights the challenges policymakers face in managing both inflation and
unemployment in the economy.
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 10.
Principle 4: People respond to ________.
Explanation
Principle 4 states that people respond to incentives. This means that individuals
are motivated to take certain actions or make certain choices based on the
potential rewards or benefits they will receive. Incentives can be in the form of
monetary rewards, recognition, promotions, or any other positive outcome that
drives individuals to act in a certain way. By understanding this principle,
organizations and individuals can design effective strategies and systems that
align with people's motivations and encourage desired behaviors.