ECON 1BB3 Chapter 1: Chapter 1 - Ten Principles of Economics

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ECON 1BB3 Full Course Notes
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ECON 1BB3 Full Course Notes
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Document Summary

Economy comes from the greek word one who manages a household. Economics: the study of how society manages its scarce resources. An economy is a group of people interacting with one another. 10 principles of economics: people face tradeoffs. To get one thing that we want, we usually have to give up another thing. When people are grouped into societies, they face different kinds of tradeoffs. The classic tradeoff is between guns and butter. the more we spend on national defense (guns) to protect our shores from foreign aggressors, the less we can spend on consumer goods (butter) to raise our standard of living. Also, the tradeoff between a clean environment and a high level of income. Efficiency: the property of society getting the most it can from its scarce resources. Equity: the property of distributing economic prosperity fairly among the members of society.