CHAPTER 1 NOTES - Economics Chapter 1 Economics- Social...

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Economics Chapter 1 Economics - Social science concerned with how individuals, institutions, and society make optimal (best) choices under conditions of scarcity. Economic Perspective - A unique perspective, several critical and closely interrelated features. Opportunity Cost - ( Idea there is no free lunch) To obtain more of one thing, society forgoes the opportunity of getting the next best thing. Utility - The pleasure, happiness, or satisfaction obtained from obtaining a good or service. Marginal analysis - Comparisons of marginal benefits and marginal costs, usually for decision making. Scientific Method - Procedure- Observing real-world behavior and outcomes. Based on these observations, formulating a possible explanation of cause and effect (hypothesis) Testing this explanation by comparing the outcomes of specific events to the outcome predicted by the hypothesis. Accepting , rejecting, and modifying the hyposthesis, based on these comparisons. Continuing to test the hypothesis against the facts. Economic Principle - A statement about economic behavior or the economy that enables the prediction of the probable effects of certain actions. Other-Things- Equal-Assumption
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CHAPTER 1 NOTES - Economics Chapter 1 Economics- Social...

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