econ 140 -ch1-.ppt - CHAPTER 1 INTRODUCTION WHAT IS ECONOMICS Parkin\"Economics Adapted by Dr Anis Khayati 1 Definition of Economics All economic

econ 140 -ch1-.ppt - CHAPTER 1 INTRODUCTION WHAT IS...

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CHAPTER 1 INTRODUCTION: WHAT IS ECONOMICS? Parkin "Economics" Adapted by Dr. Anis Khayati 1
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Definition of Economics All economic questions arise because we want more than we can get. Our inability to satisfy all our wants is called scarcity . Because we face scarcity, we must make choices . The choices we make depend on the incentives we face. Parkin "Economics" Adapted by Dr. Anis Khayati 2
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Definition of Economics Economics is the social science that studies the choices that individuals, businesses, governments, and societies make as they cope with scarcity. Parkin "Economics" Adapted by Dr. Anis Khayati 3
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Definition of Economics Microeconomics is the study of choices made by individuals and businesses, and the influence of government on those choices. Macroeconomics is the study of the effects on the national and international economy of the choices that individuals, businesses, and governments make. Parkin "Economics" Adapted by Dr. Anis Khayati 4
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Three Big Economic Questions Two big questions summarize the scope of economics: How do choices end up determining what , how , and for whom goods and services get produced? When do choices made in the pursuit of self-interest also promote the social interest ? Parkin "Economics" Adapted by Dr. Anis Khayati 5
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Two Big Economic Questions What, How, and For Whom? Goods and services are the objects that people value and produce to satisfy wants. What ? What goods and services to produce and In what quantities? Parkin "Economics" Adapted by Dr. Anis Khayati 6
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Two Big Economic Questions How ? How to produce goods and service? Goods and services are produced by using productive resources that economists call factors of production .
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