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How People Make Economic Decisions In todays economic condition it has become imperative that we as consumers drag good and smart conclusions in our everyday activities. These decisions can be difficult as they apply to everyones individual lifestyles. The firmness to these difficulties to look for different ways to sword decisions and determine what is grievous and what is not. The four principles of individual decision making are trade-offs, chance approach, rational thinking, and invectives. Trade-offs is the idea that because of scarcity, producing more of one good or service means producing less of another. (Hubbard, 2010). The second principle is opportunity cost. Opportunity cost is the highest valued alternative that must be given up to engage in an activity (Hubbard, 2010). The terms of a product or service is what the individual gives up to obtain it. Opportunity cost is useful for consumers when analyzing the marginal cost and marginal benefit of choices presented. Discounts and incentive motivate consumers to make purchases. benevolent beings act from a variety of motives, including religious belief, envy, and compassion (Hubbard, 2010). The trey principle of economic decision deals with incentives given to the consumer.

The idea that individuals make decisions based on the benefits that they bequeath receive from purchasing a good or service. The forth principle is taking the laying claim that individuals think rationally. Marginal cost and benefits allow an individual to perk all aspects of the decision that he is trying to make. An example of a decision which the marginal costs and benefits were weighed to make a decision in my life was to purchase a new orchard apple tree Iphone. In my case, the marginal benefits of purchasing a Apple Iphone will be the increase in work efficiency payable to better performance of the new computer. However, the marginal benefits will be the decline in disposal income which could be spent on compulsory textbooks for my education. If you want to get a full essay, target it on our website: Orderessay

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