ch01slecture - INTRODUCTION PART 1 CHAPTER Getting Started...

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PART 1 INTRODUCTION Getting Started CHAPTER 1
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C H A P T E R C H E C K L I S T When you have completed your study of this chapter, you will be able to Define economics and explain the questions that economists try to answer. 1 Explain the core ideas that define the economic way of thinking. 2
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1.1 DEFINITION AND QUESTIONS All economic questions and problems arise because human wants exceed the resources available to satisfy them . Scarcity The condition that arises because the available resources are insufficient to satisfy wants. Faced with scarcity, we must make choices —we must choose among the available alternatives. The choices we make depend on the incentives we face.
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1.1 DEFINITION AND QUESTIONS Economics The social science that studies the choices that we make as we cope with scarcity and the incentives that influence and reconcile our choices . Two big economic questions: How choices determine what, how, and for whom goods and services get produced? When do choices made in self-interest also promote social interest ?
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1.1 DEFINITION AND QUESTIONS What, How, and For Whom? Goods and services The objects (goods) and actions (services) that people value and produce to satisfy human wants. What goods and services get produced and in what quantities? How are goods and services produced? For Whom are the various goods and services produced?
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When Is the Pursuit of Self-Interest in the Social Interest? Self-interest The choices that are best for the individual who makes them. Social interest
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ch01slecture - INTRODUCTION PART 1 CHAPTER Getting Started...

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