Economics 1302 HW #1 - 1 What were the definitions of...

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1. What were the definitions of “economics” and “capitalism” that we discussed in class? Compare and contrast the definition we talked about in class and what you thought about these concepts before class. In your opinion, which definitions do you think provide a better description of economics and capitalism? (Yes, you can disagree with the book/lectures)/. Explain your reasoning. The definition of economics is inclusive to the study of how society manages resources to meet the needs and enhance well-being. Capitalism is one way of organizing economic activity, in which markets generally determine what gets produced in society, how it gets produced, how both that stuff and the costs and benefits of production are distributed in society. Before class the terms, economics and capitalism seemed more sophisticated and corporate business like. I agree with both definitions of the terms mentioned above from our notes. This is because there is a bigger picture to both terms but these definitions show more of the foundations and make it simplistic. I can learn from the definitions mentioned that economists and economic decisions impact your daily life, and can give us a well-informed opinions about things. 2. What are some of the different ways that the textbook defines “rationality” in economics? Do you believe that “only self-interested behavior is rational”? Explain why or why not. Give one or two examples to support your position. Some different ways the textbook defines rationality includes selecting goals that are consistent with present and future well-being, pursuing those goals in a way that will most likely help you achieve them. I do not believe that “only self-interested behavior is rational”, my reasoning being that when a person hears rational they automatically assume you probably mean that he or she is acting in a thoughtful, clear-headed way as opposed to irrationally, which suggests that someone is not acting emotionally. This is true because in reality small businesses and most people don't maximize profits over people and their self interests, the macro in economics might, but not the micro which focuses on workers, consumers, and small business decision-makers. If they did act “rational” there would be no right and wrong in this world and everyone would always try to be ahead of one another.

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