Chapter 1 - Chapter 1 Notes Chapter 1 Notes: Study of...

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Chapter 1 Notes Chapter 1 Notes: Study of choices with limited resources The economic approach sheds light on many social issues such as discrimination, education, crime and divorce. Main front page stories are filled with articles related to economics. Economics —The study of the allocation of our limited resources to satisfy our unlimited wants. Resources —Inputs that are used to produce goods and services. Four Factors of Production (CELL—Capital, Entrepreneurship, Land, Labor) Scarcity —Forces us to make choices on how to best use our limited resources Economic Problem —Scarcity forces us to choose. And choices are costly because we must give up other opportunities that we value. Living a world of scarcity means facing tradeoffs Economics, like the other social sciences, is concerned with reaching generalizations about human behavior. Two main branches: o Macroeconomics —(Forest) The study of the aggregate or total economy. o It looks at economic problems as they influence the whole of society, including the topics of inflation, unemployment, business cycles, and economic growth. o Microeconomics —(Trees) Deals with the smaller unites within the economy, o It attempts to understand the decisions making behavior of firms and household
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This note was uploaded on 05/09/2008 for the course ECON 200 taught by Professor None during the Spring '08 term at Pepperdine.

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Chapter 1 - Chapter 1 Notes Chapter 1 Notes: Study of...

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