ECON-211 Exam #1
Economics - Definition: - ️ Social science concerned with using scarce resources to obtain the maximum satisfaction of the
unlimited material wants of society.
Three Features of Economics
1. ️ Scarcity and Choice
2. ️ Purposeful Behavior
3. ️ Marginal Benefits ...
- ✔️ Social science concerned with using scarce resources to obtain the maximum satisfaction of the
unlimited material wants of society.
Three Features of Economics
1. ✔️ Scarcity and Choice
2. ✔️ Purposeful Behavior
3. ✔️ Marginal Benefits & Costs
Definitions and Concepts
- Scarcity:
- ✔️ The conflict between relatively unlimited wants vs. relatively limited resources.
- Impact of Scarcity:
- ✔️ Restricts options and demands choices (forces people to make a choice).
- Opportunity Cost:
- ✔️ To obtain more of one thing, society forgoes the opportunity of getting the next best thing (cost
is the value of the next best alternative that was not chosen).
- Utility:
- ✔️ The pleasure, happiness, or satisfaction obtained from consuming a good or service.
- Purposeful Behavior:
- ✔️ People make decisions with some desired outcome in mind.
, - Marginal Analysis:
- ✔️ Comparisons of marginal benefits and marginal costs, usually for decision making.
- Marginal:
- ✔️ Extra, additional, change in.
- Economic Principle:
- ✔️ Statement about economic behavior or the economy that enables prediction of the probable
effects of certain actions.
- Purposeful Simplifications:
- ✔️ Theories, principles, and models.
- Generalizations:
- ✔️ Economic principles are generalizations relating to economic behavior or the economy itself.
- Other-Things-Equal Assumptions:
- ✔️ The assumption that factors other than those being considered do not change.
- Graphical Expression:
- ✔️ The way economists express many findings.
Branches of Economics
- Microeconomics:
- ✔️ Decision making by individual customers, workers, households, and business firms.
- Macroeconomics:
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