Chp1 - Chapter 1 CHOICES THE BASICS 2 1.1 INTRODUCTION 3 Get to choose what TV show to watch Get extra dessert at dinner Do the laundry Cook dinner

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Unformatted text preview: Chapter 1 CHOICES: THE BASICS 2 1.1 INTRODUCTION 3 Get to choose what TV show to watch Get extra dessert at dinner Do the laundry Cook dinner Household Household 4 Society What job will be done and who will do them grow food make clothing design computer software… Who will get the output of goods and service Who will eat caviar and who will eat potatoes; Who will drive Ferrari and who will take bus... 5 Let’s go! 6 1.2 THREE CONCEPTS SCARCITY CHOICES OPPORTUNITY COST 7 1.2.1 SCARCITY Definition the limited nature of society’s resources. 1. we seek to satisfy our many and varied needs and wants 2. but our income is scare 3. so we have to make choices about which needs and wants we will satisfy. Model an assumption + a constraint = a consequence 8 NEEDS AND WANTS Needs : need to survive basic food, clothing, shelter Wants: would like to have but not for survive fast food, chic clothing, good music collection, tickets to rock concert… 9 NEEDS Physiological needs to remain alive physically e.g. oxygen, water, basic food, shelter, refuge… Social needs to belong to the society e.g. TV set, radio, telephone… 10 1.2.2 CHOICE Time of students Income of family Guns and butter Efficiency and equity 11 Time of students Watching TV Time Economics Psychology Napping Part-time job 12 Income of family buy food, clothing family vacation retirement children’s college education 13 Income wages or salaries interest profits dividends rent 14 Efficiency The property of society getting the most it can from its scarce resource...
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This note was uploaded on 12/06/2011 for the course BUSINESS Finance taught by Professor Qiuxin during the Summer '11 term at Nanjing University.

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Chp1 - Chapter 1 CHOICES THE BASICS 2 1.1 INTRODUCTION 3 Get to choose what TV show to watch Get extra dessert at dinner Do the laundry Cook dinner

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