Microeconomics Assignment: Principles, Trade-offs, and Market Dynamics

This document presents a comprehensive solution to a microeconomics assignment based on N. Gregory Mankiw's "Principles of Economics." The assignment covers the first chapter, which introduces the ten principles of economics. It explores how individuals make decisions, focusing on trade-offs, opportunity costs, and rational behavior. The document also examines how people interact, emphasizing the benefits of trade and the role of markets in organizing economic activity, including the concept of the "invisible hand." Furthermore, the assignment delves into how the economy as a whole works, addressing the importance of productivity, inflation, and the trade-off between inflation and unemployment. Key concepts such as efficiency, equality, production possibilities frontier, incentives, and market failures are explained with examples and diagrams. The document also touches on the role of government in addressing market failures and promoting economic well-being. The assignment provides a detailed overview of the fundamental concepts in microeconomics and their practical applications.