WORKING WITH THE STUDY OF ECONOMICS

Chapter 1<br > Economic Choices<br >I. Chapter Outline<br >Scarcity of resources relative to our needs and wants requires that we make choices about<br >the alternative uses of those resources. The economic choices that society makes are<br >made in the light of certain goals. Various tools of economic analysis assist us in making<br >those choices.<br >Introductory Article: We Are the World<br >Starvation in Africa illustrates the eternal conflict between human economic needs and<br >the resources available to satisfy those needs. The gap between our basic needs and other<br >wants and the world s limited resources results in the problem of scarcity.<br >Economic Analysis<br >This chapter examines the problem of scarcity by addressing the following three<br >questions:<br > 1. Why Do We Have To Make Economic Choices?<br > Key Concepts: Scarcity， Trade-offs， Opportunity costs<br > Key Model: Production possibility frontier<br > Case Application: Dieting-- The National Pastime<br > 2. What Are Society s Economic Goals?<br > Key Concepts: Efficiency， Price stability， Full employment， Growth，<br > Socioeconomic goals<br > Case Application: Replaced by R2D27<br > 3. How Does the Study of Economics Help Us Make Choices?<br > Key Concepts: Economic Reasoning， Concepts， Models， Statistics， History，<br > and Institutions<br > Case Application: Does It Pay to Go to College?<br >Perspective: The Affluent Society<br > Biography-- John Kenneth Galbraith<br >II. Summary of Economic Analysis<br > 1. The most basic problem economics is concerned with is scarcity.<br > 2. Any good that commands a price is scarce and is considered an economic good.<br > 3. The degree of scarcity of a good depends on how much is available relative to the<br > amount wanted.<br > 4. Since resources are scarce， there is a trade-offbetween alternative uses.<br >