Principles of Microeconomics, 7th Edition

Published by South-Western College
ISBN 10: 128516590X
ISBN 13: 978-1-28516-590-5

Chapter 1 - Part I - Ten Principles of Economics - Questions for Review - Page 17: 1

Answer

1. Time: Choosing to use your time to study instead of hanging out with friends 2. Money: Choosing to use your money to go to a movie instead of going to an amusement park 3. Efficiency vs. equality: When a government chooses to redistribute income from the wealthy to the poor, it reduces the reward for working hard, but they also help those in need. Thus, there must be a balance, for you want to promote a strong economy in which people work hard while, at the same time, protecting those who are at the bottom of the social latter.

Work Step by Step

In general, people have limited amounts of resources (that is, we don't have unlimited amounts of money, time, etc.). We must distribute these limited resources in a way that makes us best off. In distributing these resources, we face a trade-off (in that we benefit by choosing to allocate toward using one resource and lose by having to give up other resources).
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