Intro - I Introduction Economics is a social science That...

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I. Introduction Economics is a social science. That is, we will try to understand how people interact individually and in groups. We will also study the institutions society has created to help people better interact and we will consider public policy issues that have economic content.
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The Economic Problem Humans have basic needs for survival:  Food, clothing shelter.  And have virtually unlimited wants for goods and services. Most things don’t “grow on trees”-- they must be produced. The resources available to produce these goods and services  are  limited.   Economics  is the study of  how individuals and societies best  meet these unlimited wants with finite resources.
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Resources Land  (Natural Resources): Fertile land,  forests, water, minerals, oil, etc.  Labor  (Human Capital): Physical Strength  and skills of people. (Physical) Capital : Buildings, tools,  infrastructure.
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Scarcity We say these resources are  scarce   because they are  finite .  Society can not  meet all its needs and wants with the  resources available.
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While all the social sciences seek to understand  human interaction, each discipline—economics,  sociology, psychology, etc.—uses its own  approach. Economists like to think our discipline is different  (read: “better”!)  than the other social sciences in  that we use a basic, unifying method or approach  to the study of all subjects and issues of interest.
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All courses in economics hope to get students to  use this approach or to  “think like an economist” What does this mean?? Textbook lists 10 “unifying ideas” in chapter 1.
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In economics we assume individuals are  Rational: Have well-defined goals and act in ways that best  help meet those goals.  
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1. People Face Tradeoffs Everything  has a cost (Because of scarcity) 2. Opportunity Cost The cost of something is what you give up to get it. 3.
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This note was uploaded on 04/07/2008 for the course ECO 210 taught by Professor Sun during the Fall '08 term at Grand Valley State.

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Intro - I Introduction Economics is a social science That...

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