In today's economy, decision-making capabilities vary for each family; however, every individual's ultimate goal is to get the most out of their money. To do this, there are 4 principles of individual decision making: address tradeoffs, evaluate what you are giving up to achieve your goal, think about the margin, and respond to incentives. The first principle of individual decision making faces a trade-off. In order for individuals to achieve their goals or obtain something they desire, there is usually something that must be given up or exchanged to achieve this goal. Chapter 1 Principles of Economics discusses the relationship between efficiency and equity, which helps further explain this principle. The company always wants to get the most for its money; get the best they can. This is called efficiency. As we seek to make the most of our daily decisions, we must also consider fairness and ensure that the economic prosperity of our decisions is equally distributed. The second principle goes hand in hand with the first. “Because people have to deal with compromises, Mom...