Making the best individual economic decisions requires knowledge of the effects of possible decisions. To accomplish this, individuals follow certain guidelines, sometimes unbeknownst to them. Economists call the steps individual take to make decisions the Four Principles of Economic Decision Making. Economists use this principle to forecast choices individuals make given certain variables. The first principle is that people face tradeoffs. This principle states when individuals make choices, they give up something. In other words, nothing is free because another option was not chosen. Economists often say, "There is no such thing as a free lunch." (Mankiw, 4) Society is often faced with such choices, such as the trade off between efficiency and equity. When government redistributes wealth to give everyone a more equitable slice of pie, the size of the pie decreases. (Mankiw, 5) The choice to give more to the poor has the trade-off of less overall productivity. The cost of something is what you give up to get it is the second principle. People must know the options b......

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