What is economics?
2 BIG economic questions.
The economic way of thinking.
-Inability to satisfy all of our wants= SCARCITY
-Because of SCARCITY you have to make choices.
-The choices we make depend on our INCENTIVES.
DEFINITION OF ECONOMICS: Economics is the social science that studies the
choices made by individuals, firms, government, and the entire society as they
cope with scarcity.
2 BIG QUESTIONS:
-How do choices end up determining what, how and for who goods and services get produced?
-When do choices made in the pursuit of self-interest also promote the social interest?
WHAT ARE GOODS AND SERVICES?
Goods and services