Review Slides - Scarcity We have unlimited desires for...

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Scarcity We have unlimited desires for goods and services We have limited resources to produce goods and services We have to make choices A choice to have or to do one thing is necessarily a choice to not have or to not do something else
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Opportunity Cost Because of scarcity, we have to make choices between desired alternatives The next best choice not taken is considered the opportunity cost It is also described as the value of the foregone alternative Economists say there is no such thing as a free lunch because everything involves opportunity costs
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Consumption Most goods and services purchased by households are considered to be part of consumption spending. Some of these items are considered durable goods because they last for more than one period. Others are nondurable goods or services. Consumption contributes directly to our standard of living and makes up about 2/3 of the U.S. economy.
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Investment The production of new capital goods. Capital goods are goods that are used
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Review Slides - Scarcity We have unlimited desires for...

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