ECO 121 Chapter 1: Chapter 1-Ten Principles of Economics

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30 Aug 2017
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The study of how society manages its scarce resources. How society decides how to divide its resources between. Going to a party the night before your midterm leaves less time for studying. Having more money to buy stuff requires working longer hours, which leaves less time for leisure. Protecting the environment requires resources that could otherwise be used to produce consumer goods. When society gets the most from its scarce resources. When prosperity is distributed uniformly among society"s members. To achieve greater equality, could redistribute income from wealthy to poor. Reduces incentive to work and produce, shrinks the size of the economic pie The cost of something is what you give up to get it. Making decisions requires comparing the costs and benefits of alternative choices. The opportunity cost of any items is whatever must be given up to obtain it. It is the relevant cost for decision making.

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