| 1. | People must make choices because resources are scarce. |
| 2. | The opportunity cost of an item—what you must give up in order to get it—is its true cost. |
| 3. | “How much” decisions require making trade-offs at the margin: comparing the costs and benefits of doing a little bit more of an activity versus doing a little bit less. |
| 4. | People usually respond to incentives, exploiting opportunities to make themselves better off. |