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Unformatted text preview: Kristin Chen Econ Ch 1First Principles 1. Individual Choice: The Core of Economics a. Individual choice = decision by an individual of what to do, which necessarily involved a decision of what not to do i. all economic activities involve individual choice 2. Principles that Underlie the Economics of Individual Choice a. 1) resources are scarce b. 2) the real cost of something is what you must give up to get it c. 3) How much? Is a decision at the margin d. 4) people usually exploit opportunities to make themselves better off 3. Resources = anything that can be used to produce something else a. Land, labor, capital i. Labor (available time for workers) ii. Capital (machinery, buildings, & other man-made productive assets) iii. Human capital (the educational achievements & skills of workers) b. scarce = the quantity available isnt large enough o satisfy all productive uses i. natural resources (minerals, lumber, petroleum) ii. human resources (labor, skill, intelligence) iii. scarcity of resources means society as a whole must make choicesiii....
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