What Is Economics?
1. Chapter Summary
2. Chapter Outline
3. subjects for Class Discussion and Teaching Tips
broad Example 1: The Medical Care Tradeoff
Extended Example 2: Altruistic Behavior
4. Problems and Discussion Questions
5. Test Your Understanding
6. Internet Exercise
1. Chapter Summary
Chapter 1 develops the ideas of scarcity and choice that are central to political economy. Societies must contract what and how to produce goods, given scarce resources (natural resources, labor, physical capital, human capital, and entrepreneurship), and then must choose who will receive the goods. The production possibilities loop represents societys feasible choices between goods.
The division of economics into microeconomics and macroeconomics is presented, along with the type of policy questions that are answered in those fields.
The chapter concludes by discussing the methodology of economics: use of assumptions to simplify; the ceteris paribus assumption; and thought about decisions on the margin.
2. Chapter Outline
I. What is Economics?
A. A definition of economics: the study of choices made by people who are face up with scarcity
B. Scarcity: a situation in which resources are control and can be used in different ways, so we must sacrifice one thing for another
C. Three innate questions of economics
1. What goods and operate do we produce?
2. How do we produce these goods and services?
3. Who consumes the goods and services that are produced?
II. Scarcity and Production Possibilities
A. Factors of Production
1. Natural Resources:
Things created by acts of nature and used to produce goods and services (land, mineral deposits, oil and gas deposits, etc.)
2. Labor:...If you want to get a wide-cut essay, order it on our website: Orderessay
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