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| there are unlimited wants, but the resources to fulufill those wants are scarce |
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| the study of the allocation of scarce resources to study unlimited wants and desires (not always money) |
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| a simplified version of reality used to analyze a real-world economic situations |
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the study of how households and firms makes choices, how they interact in markets, and how the gov attempts to influence their choices.
-the market and regulation, consumer and firm behavior, pricing |
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the study of the economy as a whole, including topics such as inflation, unemployment, and economic growth
ideas: debt ceilings, deficits, jobs! |
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| the idea that because of scarcity, producing more of one good or service means producing less of another good or service |
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| the highest-valued alternative that must be given up to engage in an activity (changes over time) |
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trade-off force society to make choices when answering the following three fundamental questions...
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1. WHAT goods and services will be produced?
2. HOW will the goods and services be produced
3. WHO will recieve the goods and services produced? |
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| centrally planned economy |
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| an economy in which the gov decides how economic resources will be allocated |
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| an economy in which the decisions of households and firms interacting in markets allocate economic resources |
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| an econ in which the most econ decisions result from the interaction of buyers and sellers in the markets but in which the gov plays a significant role in the allocation of resources |
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