Cutting the Cheese

Imagine two adorable mice at the dinner table (mouse sized of course), and there is only one piece of cheese on the table. At the table sit a very skinny mouse and another portly mouse who moments earlier single-handedly finished off two more than generous slices cheese. And you are tasked with distributing the remaining cheese. So, how do you best cut the cheese? Should you equitably allocate the remaining slice among the two mice? Or, would you be doing the larger mouse a favor by not cutting the cheese, and feeding it to only the skinny mouse?

This scenario is my interpretation some my recent reading of a work from a well-known economist, Gregory Mankiw. He defines economics as the study of how society manages its scarce resources, much like the cutting the cheese scenario above.

Recently I came across Mankiw's microeconomics textbook (references below) that was in a pile of donated books near my apartment. His introduction in the book was a refreshing way to look at economics:

How People Make Decisions

Principle #1: People Face Tradeoffs
Principle #2: The Cost of Something Is What You Give Up to Get it
Principle #3: Rational People Think at the Margin

How People Interact
Principle #4: People Respond to Icentives
Principle #5: Trade Can Make Everyone Better Off
Principle #6: Markets Are Usually a Good Way to Organize Economic Activity
Principle #7: Governments Can Sometimes Improve Market Outcomes

How the Economy as a Whole Works
Principle #8: A Country's Standard of Living Depends on Its Ability to Produce Goods and Services
Principle #9: Prices Rise When Governments Print Too Much Money
Principle #10: Society Faces a Short-Run Tradeoff between Inflation and Une

These principles are a great starting point for understanding the field of cutting the cheese (economics) as part of my MBA. I realize this material is Mankiw's intellectual property, however, I wonder if he would donate some social capital to fund this springs enrollment :)

Source: Principles of Microeconomics, third edition (Found in pile of donated books)
Author: N. Gregory Mankiw