Ch1 - PART I INTRODUCTION TO ECONOMICS CHAPTER 1 The Scope...

Info icon This preview shows pages 1–8. Sign up to view the full content.

View Full Document Right Arrow Icon
C H A P T E R 1 T h e S c o p e a n d M e t h o d o f E c o n o m i c s 1 PART I INTRODUCTION TO ECONOMICS The Scope and Method of Economics Why Study Economics? To Learn a Way of Thinking To Understand Society To Understand Global Affairs To Be an Informed Voter The Scope of Economics Microeconomics and Macroeconomics The Diverse Fields of Economics The Method of Economics Theories and Models Economic Policy CHAPTER OUTLINE
Image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
C H A P T E R 1 T h e S c o p e a n d M e t h o d o f E c o n o m i c s The Scope And Method Of Economics economics The study of how individuals and societies choose to use the scarce resources that nature and previous generations have provided. The purpose of this chapter and the next is to elaborate on this definition and to introduce the subject matter of economics. key words: choose and scarce Economics is a behavioral, or social, science. In large measure it is the study of how people make choices. The choices that people make, when added up, translate into societal choices.
Image of page 2
C H A P T E R 1 T h e S c o p e a n d M e t h o d o f E c o n o m i c s Three fundamental concepts: Opportunity cost Marginalism Efficient markets To Learn A Way Of Thinking Why Study Economics?
Image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
C H A P T E R 1 T h e S c o p e a n d M e t h o d o f E c o n o m i c s Nearly all economic decisions involve trade-offs. Opportunity cost is directly related with these trade-offs. opportunity cost The best alternative that we forgo, or give up, when we make a choice or a decision. Opportunity cost does not have to be measured in dollar terms. The value of an alternative activity is usually measured in both monetary and nonmonetary costs. Opportunity costs arise because resources are scarce , that is, limited. Why Study Economics? Opportunity Cost To Learn A Way Of Thinking
Image of page 4
C H A P T E R 1 T h e S c o p e a n d M e t h o d o f E c o n o m i c s Question Which of the following is NOT an opportunity cost of attending college? A) the tuition you pay B) the income you could have earned if you didn't attend college C) the alternative uses of the time you spend studying D) the cost of the food that you consume while you are attending college
Image of page 5

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
C H A P T E R 1 T h e S c o p e a n d M e t h o d o f E c o n o m i c s Question If you own a building and you decide to use that building to open a book store, A) there is no opportunity cost of using this building for a book store because you own it. B) there is an opportunity cost of using this building for a book store because it could have been used in other ways. C) the only cost relevant to this decision is the price you paid for the building.
Image of page 6
C H A P T E R 1 T h e S c o p e a n d M e t h o d o f E c o n o m i c s Why Study Economics? marginalism The process of analyzing the additional or incremental costs or benefits arising from a choice or decision.
Image of page 7

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Image of page 8
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern