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the study of how people interact to use scarce resources in the production, distribution, and consumption of goods and services.
(a social science) |
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tangible economic products made to sell (i.e., books, cars, shoes, CDs, etc.) |
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intangible economic products, skilled labor
(i.e., education, healthcare, legal, housing, etc.) |
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fundamental economic problem of trying to meet unlimited wants with limited resources. |
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the value of the next-best alternative not chosen. |
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| 3 basic economic questions |
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What- goods or service to produce?
How- to produce those goods and services
For whom- to produce those goods and services? |
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| a simplified representation of complex economic activity which is based on theory |
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normative statements/economics
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| a way of describing and explaning what economics behavior ought to be, not what it actually is |
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| positive statements/economics |
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| a way of describing and explaning economics as it is |
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| n- things such as food, clothing, and shelter that are necessary for survival |
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| w-desires that can be satisfied by consuming a good or service |
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| rights of individuals and groups to own resources and businesses |
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| the benefit or satisfaction derived from the comsumption of a good or service |
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| nagative -: an externality that is a negastive effect, or cos, for people who were not invold in the orginal economic activity. (second hand smoking, water pollution) |
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| positive +: people arent involved but they benefit from it. (neighboor has a beautiful garden/ yard) |
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