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How People Make Economic Decisions

University of Phoenix

Rosemary Green

ECO/212

Instructor: Jonna Noe

December 8, 2008

How People Make Economic Decisions

Marginal costs and benefits are a vital part of economics because they help to provide the

relevant measurement of costs and benefits at a specific level of production and

consumption. Even if we do not realize it, we all make decisions based on our marginal

evaluations of the alternatives. In other words, what does it cost to produce one more unit? or

what will be the benefit of acquiring one more unit? Decisions are made by everyone involved

and a person's decision making process depends on a significant degree on their cognitive style.

Each decision we make has risks associated with it.  Because of these risks, making

decisions is often very difficult.  As you make decisions, keep in mind four basic principles.

According to N Gregory Mankiw Principles of......

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Approximate Word Count: 656
Approximate Pages: 3 (250 words per double-spaced page)

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