Chapter 1 - CHAPTER 1 What Economics Is About Chapter 1...

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CHAPTER 1 What Economics Is About Chapter 1 introduces students to economics as a way of thinking—a set of techniques used to observe, analyze, and identify problems and their possible solutions. The chapter begins by posing the question: What is economics ? The question is then answered in two ways. First, formal definitions are explored. Then the chapter introduces the economic way of thinking by presenting (1) categories of economics, (2) key concepts in economics, and (3) the building and testing of theories. KEY IDEAS 1. Economics is the science of scarcity. 2. Economics is sometimes broken down into different categories. 3. Economists think in terms of key concepts. 4. Economists build and test theories. 5. Appendix A: Economists work with diagrams. CHAPTER OUTLINE I. DEFINITIONS OF ECONOMICS A. Well-Known Definitions of Economics 1. Alfred Marshall: “Economics is a study of mankind in the ordinary business of life.” 2. Lionel Robbins: “Economics is the science which studies human behavior as a relationship between ends and scarce means which have alternative uses.” 3. Milton Friedman: “Economics is the science of how a particular society solves its economic problems.” B. This Text’s Definition of Economics Scarcity is the condition where our wants are greater than the limited resources available to satisfy them. Scarcity is the basic economic problem confronting all
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Chapter 1 - CHAPTER 1 What Economics Is About Chapter 1...

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