1.People face trade-offs
When people are grouped into societies,theyface diffrent kinds of trade off. One classic trade off is between guns and rice. The more the society spends on national defence to protect its shores from enemies than less it can spend on consumer goods to raise the standard of living at home.
2.The cost of something is what you give up to get it
Some people decide to invest lot of money in education but they forget that the amount of investment which they are investing are worth of return of investment
3.Rational people think at the margin
Water is cheap and diamonds are expensive but human needs water to survive than diamonds. People consider the marginal benifit of an extra diamond to be large.
4.People repond to incentives
The rational people make decision by comparing cost and benifits they respond to incentives. You will see that incentives play a central role in the study of economic.
5.Trade can make everyone better off
When a member of your family looks for a job he or she compete against members of other families who are looking for job.
Refered from the book- Principles of Microeconomics- N. Gregory Mankiw
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