1. Foundations and Models

1. Foundations and Models - Foundations and Models Scarcity...

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Foundations and Models Scarcity – a situation in which unlimited wants exceed the limited resources available to fulfill those wants Economics – the study of the choices people make to attain their goals, given their scarce resources Economic model – a simplified version of reality used to analyze real-world economic situations Market – a group of buyers and sellers of a good or service and the institution or arrangement by which they come together to trade Marginal analysis – analysis that involves comparing marginal benefits and marginal costs Trade-off – the idea that because of scarcity producing more of one good or service means producing less of another good or services Question needs to be asked - What goods and services will be produced - How will the goods and services be produced - Who will receive the goods and services produced Opportunity cost- the highest valued alternative that must be given up to engage in an activity Centrally planned economy – an economy in which the government decides how
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This note was uploaded on 01/19/2012 for the course CIT 230 taught by Professor Staff during the Fall '08 term at Oakland University.

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1. Foundations and Models - Foundations and Models Scarcity...

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