9 Which of the following principles underlies the interactio

9. Which of the following principles underlies the interaction of individual choices?

Marginal analysis is used for “how much” decisions.

Resources are scarce.

There are gains from trade.

People usually exploit opportunities to make themselves better off.

Solution

The principle that underlies the interaction of individual choices is - There are gain from trade.

The Gain from trade principle mainly states that :-

A market economy relies upon this basic principle; i.e., that people can get more of what they want through trade than by being self-sufficient. These gains stem from the fact that total output can be increased with specialization. This idea applies to the household the firm communities nations There can be off-setting considerations making specialization undesirable