THE CORE PRINCIPLES
The Scarcity Principle: Having more of one good thing usually means having less of another.
The Cost-Benefit Principle: Take no action unless its marginal benefit is at least as great as its marginal cost.
The Principle of Unequal Costs: Some costs (e.g., opportunity and marginal) matter in making decisions; other costs (e.g., sunk and average) don't.
The Principle of Comparative Advantage: Everyone does best when each concentrates on the activity for which he or she is relatively most productive.
The Principle of Increasing Opportunity Cost: Use the resources with the lowest opportunity cost before turning to those with higher opportunity costs.
The Equilibrium Principle: A market in equilibrium leaves no unexploited opportunities for individuals, but may not exploit all gains achievable through collective action.
The Efficiency Principle: Efficiency is an important social goal, because when the economic pie grows larger, everyone can have a larger slice.
ECONOMIC NATURALISM
THe authors' ultimate goal is to produce "economic naturalists" -people who see each human action as the result of an implicit or explicit cost-benefit calculation. The economic naturalist sees mundane details of ordinary existence in a new light and becomes actively engaged in the attempt to understand them.
