Write any four principles of economics.

Solution

Out of Mankiw's ten principles of economics, four important ones are:

People face tradeoffs: to get one thing you like, you usually have to give up another.
The cost of something is what you give up to get it: this is the idea of opportunity cost.
Rational people think at the margin: people act only when the marginal benefit of an action exceeds its marginal cost.
People respond to incentives: behaviour changes when the costs or benefits of an action change, e.g. a high tax on cigarettes discourages smoking.