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| QUICK REVIEW 1-1 |
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- Economics is concerned with obtaining maximum
satisfaction through the efficient use of scarce resources.
- The economic perspective stresses (a) resource
scarcity and the necessity of making choices
(b) the assumption of rational behavior
and
(c) comparisons of marginal benefit and marginal cost.
- Your study of economics will help you as a voting
citizen as well as benefit you professionally and personally.
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| QUICK REVIEW 1-2 |
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- Economic theories (laws
principles
or models)
are generalizations relating to the economic behavior of individuals and institutions;
good theories are supported by facts.
- Induction observes facts and generalizes from
them; deduction uses logic to create hypotheses and then tests them with factual data.
- Policy making requires a clear statement of
goals
a thorough assessment of options
and an unbiased evaluation of results.
- Some of society's economic goals are
complementary
while others conflict; where conflicts exist
tradeoffs arise.
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| QUICK REVIEW 1-3 |
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- Macroeconomics examines the economy as a whole;
microeconomics focuses on specific units of the economy.
- Positive economics deals with factual statements
("what is"); normative economics involves value judgments ("what ought to
be").
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