Here we will talk about ten principles ! I think we will discuss a lot of theory here . So preapare your mint candy !
The principle number 1 : People Face Trade Off.
Trade Off is the process that you should choose sacrifice somethings to get the another things . For the example in the same time there are football sport and basketball sport , when you choosing football sport and you can't do the basketball sport there we call it as trade off .
The principle number 2 : The cost of something is what you give up to get it.
The tittle has been describe direclty for the definition , so i will just give you example.
You learn at collage the benefits that you will get at the college are the knowledges so, what is the cost ? the cost are the things that you give up like your money , your stamina, and so far and so on .
Here we will also meet with Opportunity Cost. Opportunity Cost are the cost that you loose because you do another things . For the example there are english training session and playing footsal at the same time . If you choose playing footsal that mean your opportunity cost is knowledgel and if you choos english training session your opportunity cost is your happiness with your friends.
The principle number 3 : Rational people think at the margin
Simply here talk about the deccision making , human always choose the things that have more benefit for them than the else things. I know my word is to complicated so i will try to give you the explanation . For the example , there are job list avaible the first one is accountant job and the company provide the salaries for Rp 5.000.000 and the other company search for employees in the same positition but provide salaries for Rp 4.000.000 . The rational people must be choose the first job , because the first job provide more salaries .
The principle number 4 : People respond to incentives
This principle mean , the more you give profit to the people the more that people will work harder . For example if you come to me and buy my klepon for 5000 i will only work normaly but difference if my klepon have price 5000 and you pay to me for 10000 i will work harder and faster from before and make sure that you will not regret to pay me as 10000.
The principle number 5 : Trade can make everyone better off
Sure the trade can make everyone better off , hard explain it in theory but for the example will be like this . Me only can produce salt , i cant produce rise and chicken . That also happens at my friend place they only can produce rise and chiken so they do trade with me. That trade will make me get the chicken and rise that also happens with my friend they get salt from me .That is trade can make everyone better off .
The principle number 6 : Markets are usually a good way to organize economic activity
By using this type of market economy, the decisions of a centralized planning, replaced by the decisions of millions of firms and households. Companies decide who gets hired and what items will be produced, then households decide which will work in the company and will buy anything from their income. Companies and households interact in the market, where prices and private interests mempengruhi and guide the decisions they make.
The principle number 7 : Goverments can sometimes improve market outcomes
Here i give the example , goverment control the tax of the country itself , this tax will affect to the economic directly and also goverment policy have a big impact to the economic itself .
The principle number 8 : A country's standard of living depends on its ability to produce goods and services .
I Can't explain more , because the tittle has tell you everything . Simply for the example if some country can produce food more that mean that country are not in the condition of food shortage and that mean that country have a good standart of living . And that same for the reserve condition of it .
The principle number 9 :Prices rise when the goverment too much money
The simply explanation of this is inflation . Inflation is condition where the money in sociaty are to much that should be . That make the value from the money it self is decrease and that make the price of product increase .
The principle number 10 :Society faces a short-run trade-off between inflation and unemployment
The tradeoff between inflation and unemployment is only temporary in nature, but may take chronic. Particular country of rising inflation will reduce unemployment. But it is apparently not the case in Indonesia
Thats all i can share it to you! enjoy it !
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