ECN 204 Chapter 1: Chapter 1.docx

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Scarcity there are limited natural resources and cannot produce all the goods and service people wish to have. Economics it is how society manages its scarce resources. We have to give off one thing for another. Classic trade-off guns and butter the more money government spends on protecting the. For every dollar a person spend, he or she has one less dollar to spend, also ex. time shores and less money spend on consumer goods to raise our standard of living. Efficiency the society is getting the most from its resources. Equity the resources are equally distributed within the society: efficiency is the economic pie and the equity is how the pie is equally divided. Government take money from the rich to the poor, results in reducing the reward for the hard working and reward people that work less. Principle 2 the cost of something is what you give up to get it.