EXAMPLES OF THE 7 PRINCIPLES OF ECONOMICS Select the correct Economic Principle to explain each scenario below. A. Scarcity Forces Tradeoffs B. Costs vs. Benefits C. Thinking at the Margin D. Incentives Matter E. Trade Makes People Better Off F.

Here are the correct Economic Principles for each scenario: 1. A swimmer prepares for an upcoming swim meet and is swimming laps. She has done 10 laps of 50 meters each and is feeling a bit tired. She is wondering if an additional 5 laps will help her. **Answer: C. Thinking at the Margin** 2. A homeowner’s refrigerator is broken. He could try to fix it himself but feels it’s better to hire a professional repairman to do it. **Answer: B. Costs vs. Benefits** 3. A family goes to the grocery store and has $100 to spend. But they need $50 for gas so they only have $50 to spend on groceries. Instead of buying the things they want, they only buy the things they need. **Answer: A. Scarcity Forces Tradeoffs** 4. My employer is offering to pay double the hourly rate to work on Sunday. I was planning to spend time with my friends, but I just can’t pass up the extra money. **Answer: D. Incentives Matter** 5. I love going to the Lightridge Locker. It has all my favorite snacks to get me through the day. **Answer: E. Trade Makes People Better Off** 6. I was able to get permission to go to the bathroom during my history class so I could meet a friend, but while I was gone, I missed some very important information that was on the test. **Answer: G. Future Consequences Count** 7. I stayed after school to get help from my Economics teacher. Even though I got home later than usual, I felt the extra help would get me an A+ on the next test. **Answer: B. Costs vs. Benefits** (Alternatively, you might also consider this as reflecting G. Future Consequences Count, but since it involves weighing immediate costs against a future benefit, B is more directly applicable.)