How People Make Economic Decisions

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How People Make Economic Decisions
Brittany Hansen
June 2011
Mr. Krupka

How People Make Economic Decisions
From the time a person starts working to pay bills or buy products they are forced into making decisions that will affect their bank account. There are four different principles that play into the decision-making process. While these decisions will affect marginal benefits and costs, there are incentives for the choice as well. The principles of economics relate to the working of the economy in many ways. These attributes assist in the interactions that can affect our current economic system also.
Principles of Individual Decision-Making The four different principles of individual decision-making are: * People make
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The benefits would be minimal. With all of my options placed in front of me I decided to stay in school to continue my education.
Principles of Economics The principles of economics affect the economy in many ways. With every decision made by each individual the economy either suffers or benefits from it all. The interactions faced daily have created our economy now. The decisions trickle down the line starting with the person who is late with their bill to the CEO of the company. Eventually the company can suffer from too many customers not paying on time.
Main Attributes of Economic Systems The market economy is an economy in which most goods and services are produced and distributed through a free market (Merriam-Webster, 2009). This market is governed by the people and not the government. It gives freedom to the producers to create what is needed and wanted in a truthful manner, rather than what the government believes is needed and wanted. The centrally planned economy is defined as an economic system governed by the state and government rather than the interaction of the consumer and business. This economy seeks control of what is produced and how it is used and distributed (Investopedia, 2011). Mixed Economy is a combination of private and public enterprises. The private and public sectors share the production of goods and services. This is also known as a dual economy (Business
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