January 9 notes

January 9 notes - January 9 2006 Economics Foundations and...

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January 9, 2006 Economics: Foundations and Models Chapter 1 What Happens When U.S. Firms Move to China? It is cheaper for U.S. firms to operate in China. This process of firms producing goods and services outside of their home country is called outsourcing (sometimes also called off-shoring ). We use economics to answer questions such as: How are the prices of goods/services determined? How does pollution affect the economy, and should the government deal with it? People must make choices as they try to attain their goals. The choices reflect the trade-offs people face because we live in a world of scarcity . Scarcity: the situation where unlimited wants exceed limited resources available to fulfill those wants. Economics : the study of choices people make to attain their goals, given their scarce resources. Economic Model : simplified versions of reality used to analyze real-world economic situations. Market
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This note was uploaded on 10/28/2007 for the course ECON 205 taught by Professor Kamrany during the Spring '07 term at USC.

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January 9 notes - January 9 2006 Economics Foundations and...

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