Chapter 01

Chapter 01 - Chapter1 WhatisEconomics? 1...

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    1 Chapter 1 What is Economics?
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    2 Economics, Scarcity, and Choice Economics Study of choice under conditions of scarcity Scarcity Situation in which the amount of something available  is insufficient to satisfy the desire for it
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    3 Scarcity and Individual Choice Unlimited variety of scarcities, based on two  basic limitations: 1. Scarce time Limited number of hours in each day to satisfy our  desires 2. Scarce spending power   Cannot afford to buy more of the things we want
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    4 Scarcity and Individual Choice Limitations force each of us to make choices Economists study Choices  Consequences of those choices  Indirect effects of individual choice on our society
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    5 Scarcity and Social Choice Society faces a scarcity of resources Categories of resources: Labor Capital Human capital Capital stock Land/natural resources Entrepreneurship
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    6 Scarcity and Economics Problems studied in economics: the scarcity of  resources—and the choices it forces us to make Households – have limited income to allocate among  goods and services Firms – production is limited by costs of production Government agencies – the budget is limited, so  goals must be carefully chosen
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Chapter 01 - Chapter1 WhatisEconomics? 1...

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