chap 1,2 - Ten Principles & Economic Model

chap 1,2 - Ten Principles & Economic Model - Slide...

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Economics Definition : A social science concerned with the allocation of scarce/limited resources between unlimited and often competing needs and wants. Slide 2
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Slide 3 Principles 1. Trade-offs There is no such thing as a free lunch 1. Opportunity cost The cost of something is what you give up to get it 1. Being rational Rational people think at the margin 1. Incentives Something that induces a person to act 1. Benefit of trade Trade can make everyone better off
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Slide 4 Lessons 6. Benefit of markets Efficient distribution of resources 6. Government involvement Market failure 6. Standards of living Depends on ability to produce goods and services 6. Money supply Prices increase when the money supply increases 6. Trade-0ff between inflation and unemployment Decrease in unemployment results in increased inflation
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ceteris paribus Economics deals with generalities/statements about regularities, concerning economic behaviour. Models are simplified representations of the real
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chap 1,2 - Ten Principles & Economic Model - Slide...

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