Current microeconomic theory and thinking is based on the same premises as it has been for years. These thoughts and theories were developed through research, observation, trial and error. There are basically ten principles in economics. These principles will be discussed along with the ideas and lessons that support these principles. Additionally, this article will explain how individuals make decisions within an economy, how individuals interact economically, how scarce resources are managed, and various economic terms and their correlation with each other. Say no to plagiarism. Get a tailor-made essay on “Why Violent Video Games Should Not Be Banned”? Get an original essay The first economics lesson that should be used and talked about is the ten principles of economics. The ten principles specify how individuals make decisions, how they interact, and how the economy as a whole functions. The first four principles concern how individuals make decisions. According to Mankiw (2015), people give up one thing for another at any time, whether it is money, resources, or time. Whatever someone gives up in exchange for what they gain is essentially the price for which they get that result. Mankiw also asserted that rational individuals use and make decisions based on the margin. Finally, when it comes to how individuals make decisions, they respond to incentives. The second set of principles refers to how individuals interact with each other. These principles state that trade can benefit everyone, that a good way to organize economic activities is through the market, and that governments have the capacity to improve market outcomes (Mankiw, 2015). The third part of the principles deals with the functioning of an economy as a whole. These principles state that a country's ability to produce goods and services directly influences its standard of living. Additionally, prices in a country will increase due to overprinting of currency by the government. Furthermore, “society faces a short-term trade-off between inflation and unemployment” (Mankiw, 2015). Society manages its scarce resources by allowing a free market to exist (Mankiw, 2015). Free markets allow individuals to work at their optimal level and contribute to the overall efficiency of the whole. Additionally, all of the previously mentioned principles work together to determine how scarce resources are allocated. The supply and demand curves slope in opposite directions because as the demand for an item increases, the supply of that item decreases. As demand increases, supply decreases. For example, if a hundred people all want to buy the same brand of a particular product at around the same time from the same seller, then the supply decreases. If this were graphed, we would see the supply curve going in one direction while demand goes in the opposite direction. Economic interdependence is essentially the idea that all individuals in a society depend on and benefit from each other. Products or services that a person needs are provided by another person in exchange for something of value that is needed by the person to whom those products or services were provided. This exchange between individuals is constantly evolving and never stops, allowing the economy to continue functioning.