ECN 104 Chapter 1: Chapter 1
13 Oct 2011
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Document Summary
Chapter 1: the management of society"s resources (example: people, land, buildings, and machinery) is important because resources are scarce. Scarcity means that society has limited resources and therefore cannot produce all the goods and services people wish to have: economics is the study of how society manages its scarce resources. In most societies, resources are allocated not by a single central planner but through the combined actions of millions of households and firms: economists also study how people interact with one another. They also analyze forces and trends that affect the economy as a whole, including the growth in average income, the fraction of the population that cannot find work, and the rate at which prices are rising. How people make decisions: an economy is just a group of people interacting with one another as they go about their lives.
