University:
Texas A&M University
Course:
ECON 202 | Principles of Economics
Academic year:

2020
Views:

287

Pages:

4
Author:

Alma Stephenson

Chapter 1 Ten Principles of Economics Resources are Scarce • Scarcity: the limited nature of society’s resources • Society has limited resources – Cannot produce all the goods and services people wish to have • Economics – The study of how we make choices about allocating limited resources to satisfy our needs and wants 2 Economists Study… 1. How people make decisions 2. How people interact 3. How the economy as a whole works 3 1. How people make decisions • Making decisions requires trading off one goal against another – 1hr of study vs 1hr of TV – Efficiency vs Equality • Opportunity cost – What you give up to obtain something Example What is the opportunity cost of going to college for a year? • Tuition, books, and fees? (O) • Room and board? (X) • Foregone earnings? (O) 4