Dear Dr. Mankiw,
I've been using your introductory textbook for a couple years. I tell students that in five years if all they remember about economics is the first chapter, then their efforts will not be wasted. To help them remember, I created this acrostic device. It finally occurred to me that it might be useful to others. So if you like it, feel free to use it, in class or in the 6th edition. The acrostic is ECONOMICS!! The attached explains the connection to the ten principles.Thank you, Gordon, for sharing this. Here it is:
BTW, I am a regular reader of your blog, and I appreciate your views and the wide scope of views you moderate on your blog. You have directed me to quite a few places and opened doors I wouldn't have found so easily.
Ten Key Principles in Economics
Everything has a cost. There is no free lunch. There is always a trade-off.
Cost is what you give up to get something. In particular, opportunity cost is cost of the tradeoff.
One More. Rational people make decisions on the basis of the cost of one more unit (of consumption, of investment, of labor hour, etc.).
iNcentives work. People respond to incentives.
Open for trade. Trade can make all parties better off.
Markets Rock! Usually, markets are the best way to allocate scarce resources between producers and consumers.
Intervention in free markets is sometimes needed. (But watch out for the law of unintended effects!)
Concentrate on productivity. A country’s standard of living depends on how productive its economy is.
Sloshing in money leads to higher prices. Inflation is caused by excessive money supply.
!! Caution: In the short run, falling prices may lead to unemployment, and rising employment may lead to inflation.