Econ Chapter 1

CHAPTER 1 THINKING LIKE AN ECONOMIST Scarcity substance that we soak up to make choices, more than of one veracious means choosing little(prenominal) of another. scotchs is the study of how people make choices under conditions of scarceness and of the results of those choices for society. The scarcity problem: although we wealthy person boundless needs and wants the resources lendable to us, including time, atomic number 18 limited. Scarcity means that we have to make choiceshaving more of one good thing ordinarily means having less of another. The toll-benefit principle: an individual (or a strong or a society) will be better pip fetching an bring through if, and only if, the extra benefits from winning the action are greater than the extra be. Economic description of best takes into account some(prenominal) the benefits and the costs of different class sizes as perceived by you (or your parents). Rational person is someone with absolved goals who tries to fulfill those goals as best he or she piece of ass The cost-benefit principle is a primitive tool for the study of how sharp people make choices. Economic surplus is the benefit of taking any action electronegative its cost. Opportunity cost is the regard as of the next-best alternative that must be foregone in allege to undertake the activity Opportunity costs can be either hardcore or unexpressed.

An explicit opportunity cost requires an outlay or payment. By sacrificing an income, you are incurring an implicit opportunity. The total opportunity cost of any action is the chalk up of explicit and implicit o pportunity costs. irrefutablely charged p! olitical economy: economic analysis that offers cause-and-effect explanations of economic relationships; the propositions, or hypothesis, that cut from positive economics can, in principle, be confirmed or refuted by data; in principle, data can as head be used to measure the magnitude of effects predicted by positive economics. Normative economics: economic statements that reflect inseparable value judgments and that are based on ethical...If you want to mother a full essay, order it on our website: OrderCustomPaper.com

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