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FS09EC2106_CH1 - ECON 2106 Professor Byung-Cheol Kim What...

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ECON 2106 Professor Byung-Cheol Kim
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. . . The word economy comes from a Greek word for “one who a household.” The management of society’s resources is important because resources are . Scarcity means that society has limited resources and therefore cannot produce all the goods and services people wish to have. Economics is the study of how society manages its scarce resources. Link to “New Ideas from Dead Economists” What is economics?
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© 2007 Thomson South-estern A household and an economy face many decisions: § Who will work? What kinds of job? How much to work? § What goods and how many of them should be produced? § What resources should be used in production? § At what price should the goods be sold? § Your examples § Your examples
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© 2007 Thomson South-estern Principles 1-4 :HOW PEOPLE MAKE DECISIONS 1. People face . 2. The cost of something is what you to get it. 3. Rational people think at the . 4. People respond to .
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“There is no such thing as a free lunch!” To get one thing, we usually have to give up another thing. Guns v. butter Leisure time v. work Efficiency v. equity This class v. so many alternatives Your examples Principle #1: People Face Trade-offs.
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Principle #2: The Cost of Something Is What You Give Up to Get It.
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