A- Economics deals with economic choices (decisions) individuals, firms and nations make. The adage, "There is no such thing as a free lunch," is used to illustrate the principle that people face tradeoffs to make economic decisions.
- Why do economic agents need to make choices in the decision making process? What are the factors that force us to make choices among the viable alternatives at our disposal during a given period of time?
- Why do economic agents face tradeoff in our economic choices (economic decision making) process? How do we make a rational choice among the viable alternatives we have as individuals or business owners?
B- The economy works via the interactions of economic agents (interactions of economic choices). Economists claim that pursuing self-interest based on our skills leads to trade based specialization and mutual gains from trade.
- Think of a recent purchasing decision in which you compared the marginal benefits associated with buying a product with the marginal costs. How do you make a rational decision by comparing marginal benefits and marginal costs?
- What is the role of self-interest in free market operations (economic choice interactions)? Why engagement in self-interest may lead to better welfare for the society?
EACH QUESTION 200 WORDS