chp 1 zupi reading notes (econ).docx - Maren Bowers Section 2 Every resource is scarce Competition is key Only so many workers minerals machines and

chp 1 zupi reading notes (econ).docx - Maren Bowers Section...

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Unformatted text preview: Maren Bowers Section 2 Every resource is scarce Competition is key Only so many workers, minerals, machines, and other resources can be used at any given time to produce goods and services. Normative Economics Of positive economics Make Trade Offs Incentive Cost benefit analysis Scarce resources Section 3 Principle Scarcity forces trade offs Symbol One-sentence summary Running low on something results in trading Cost versus benefits` What will you lose and what will you gain that will better you in the outcome Thinking at the margin Thinking outside of the main thing and seeing the whole picture Incentives matter Offering rewards to get people to do specific actions Trade makes people better off Trading will give you and that person a better, useful product for yourself Markets coordinate trade Bringing people and buyers together through markets Future consequences count Choosing certain actions based on how they will affect the future Ask a question: an economist would use this tool to pose a question that they would like to answer. Would raising highway speed limits improve the economy? Conducting studies and collecting data: An economist would use this tool to test their hypothses and theories and use the data they collect to make an overall decision about a topic. For example an economist might want to test how gas prices have increased over the years, so they would conduct a study to gather the rates at which they have increassed,and then analyze that information to find % Research the question: An economist would use this tool to get more background on the subject that they plan to look at. An example of this would be if the economist was going to look at the past sales and prices of gas within the past years Analyzing the data: An economist would use data and compare it to their data and hypothesis to see if their finding will be able to prove their findings. Section 4 Developing a hypothesis: An economist would use this tool to develop a clear statement as to what they think the answer will be. For example if an economist was looking into gas price increase they might blame the limited natural resources and then work to prove what they have just claimed Evaluating the hypothesis: An economist would use this tool to either prove or show that their hypothesis is correct or incorrect. 3. Economics, with its dependence on endlessly comparing present-day numbers to month-ago numbers, needs a way to show that data other than just listing numbers in lines of type. And because many people can digest information more easily if they see it on a graph, Economics can accommodate them by showing graphs and tables and charts that put a visual face on what is essentially a bunch of numbers. 4. The rational-behavior model is the idea that people behave in ways that are based on reason and self-interest. It theorizes that people behave in ways that are rational, or based on reason. This means that people make decisions that they think will fulfil their wants and needs to the greatest extent possible. An example from my own life is that when I go grocery shopping for my family and they’re not there, I get things I want rather than what they want. ...
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