Chapter One - What is Economics? (Continued) Economics is...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
1 Chapter One Economics: The World Around You What is Economics? (Continued) • Economics is form of applied logic (reasoning). – Economists study the reasoning that drives economic decisions and outcomes. – One might think of economics as the study of unintended consequences . – Understanding causes and effects is critical to: • understanding the ultimate consequences of economic events and • effective and responsible policy making. Definition of Economics Economics is the study of how scarce resources are allocated among unlimited wants. • To understand this definition, we must examine the concepts of scarcity , economic choice , and rational self-interest . Human Nature and Reality • People have unlimited wants . • People have limited resources to acquire the things they want. • As a result, they must make choices . • Choices involve pursuing some things while forgoing others. Scarcity, Goods and Bads • An item that costs something is called scarce . – Anything with a price on it is called an economic good —these include goods and services . –A
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 3

Chapter One - What is Economics? (Continued) Economics is...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online