chapter 1Introduction to Economics

This chapter introduces what economics is and why people are sometimes confused by the subject. In addition to the jargon that economists use, economics requires a different way of thinking about problems from the way most people are used to. While economists disagree on many topics, there are some basic principles that they do agree on.

CHAPTER OBJECTIVES

After completing this chapter, the student should be able to:

1. Describe the reasons why many people struggle with economics.

2. Describe what is meant by economic resources.

3. Define opportunity costs and explain why opportunity costs are considered more important than explicit costs.

4. Describe what is meant when economists say that someone thinks “rationally.” ...

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