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How are individual makes choices?
Fundamental principles behind the individual choices are as follows:
1. Resources are scarce.
2. The real cost of anything is what you should give up to get this
Opportunity cost
This is all about what you have to forgo to acquire your choice.
3. "How much", this is a decision at the margin.
Trade-offs
Marginal decisions and marginal analysis
4. People generally take advantage of opportunities to make them better off.
Incentives
#“Nominal GDP declined between 2008 and 2009, therefore the GDP deflator must also have declined.”
C=100+0.75Yd How do i calculate marginal propensity to consume?
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