Outline ch 2 - Chapter 2 Economics Defined: problem of...

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Chapter 2 Economics Defined: problem of scarce resources and unlimited human wants. - Not enough resources available to produce goods and services to satisfy the unlimited wants of people force people to make choices. Micro and Macro Economics Microeconomics examines the choices of individual decision makers, primarily households and firms. - Supply and Demand is a tool economists use to describe the operation of competitive markets. Macroeconomics is the study of the economy as a whole. - Topics include the nature and causes of inflation and unemployment. - Affects issues in the sport industry. Economic Profit vs. Accounting Profit - Profit = Total Revenue – Total Cost (Same Definition for both) - Total Cost means something different for each - Economic – Total Cost: All of the Opportunity Cost of Production - Accounting – Total Cost: Only Explicit Cost o Accounting Profit = total revenue – explicit costs (payments for factors of production) o Economic Profit = total revenue –explicit costs –implicit costs (opportunity
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Outline ch 2 - Chapter 2 Economics Defined: problem of...

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