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MicroeconomicsChapter 1 What Is Economics?How do choices end up determining what, how, and for whom goods and services are produced?Can the choices that people make in the pursuit of their own self-interest also promote thebroader social-interest?)))
Entrepreneurship-the human resource that organizes labor, land, and capital (earns profit)For whom? – who consumes the goods and services that are produced depends on the incomes that people earnLabor earns the most income of the four factors of production. (wages and fringe benefit?外外外 - 70%)Self-interest – A choice is in your self-interest if you think that choice is the best one available for you.Social interest – A choice is in the social interest if it leads to an outcome that is the best for society as a whole.Economists say that efficiency is achieved when the available resources are used to produce goods and services at the lowest possible cost and in the quantities that give the greatest possible value or benefit.The big questionExamples:Globalization – the expansion of international trade, borrowing and lending, and investment. The information-age economy – the technological change of the past forty years has been called the Information RevolutionClimate changeEconomic instability – the year between 1993 and 2007 were a period of remarkable economic stability, so much so that they’ve been called the Great Moderation. Six key ideas that define the economic way of thinkingA choice is a tradeoff. – we select from the available alternativesA tradeoff is an exchange – giving up one thing to get something else.