A Economics: Studying Choice In a World of Scarcity Wants vs Resources Scarcity Choices Chapter 1: Thinking Like an Economist Slide 6
MB MC Chapter 1: Thinking Like an Economist Slide 6 Economics: Studying Choice In a World of Scarcity Wants vs. Resources Scarcity Choices
A Economics: Studying Choice In a World of Scarcity a The Scarcity Principle o Boundless wants cannot be satisfied with limited resources Therefore, having more of one thing usually means having less of another o Because of scarcity we must make choices Chapter 1: Thinking Like an Economist Slide 7
MB MC Chapter 1: Thinking Like an Economist Slide 7 Economics: Studying Choice In a World of Scarcity ◼ The Scarcity Principle ⚫ Boundless wants cannot be satisfied with limited resources. ⚫ Therefore, having more of one thing usually means having less of another. ⚫ Because of scarcity we must make choices
A Economics: Studying Choice In a World of Scarcity Economics The study of how people make choices under conditions of scarcity and of the results of those choices for society. Chapter 1: Thinking Like an Economist Slide 8
MB MC Chapter 1: Thinking Like an Economist Slide 8 Economics: Studying Choice In a World of Scarcity ◼ Economics ⚫ The study of how people make choices under conditions of scarcity and of the results of those choices for society
A Economics: Studying Choice In a World of Scarcity a The Cost-Benefit Principle o An individual (or a firm or a society) should take an action if, and only if, the extra benefits from taking the action are at least as great as the extra costs Chapter 1: Thinking Like an Economist Slide 9
MB MC Chapter 1: Thinking Like an Economist Slide 9 Economics: Studying Choice In a World of Scarcity ◼ The Cost-Benefit Principle ⚫ An individual (or a firm or a society) should take an action if, and only if, the extra benefits from taking the action are at least as great as the extra costs
A Economics: Studying Choice In a World of Scarcity a choosing the optimal class size Revisited Assumptions e Two class sizes: 100 and 20 o Introductory economics classes have 100 students ● Question e Should the class size be reduced to 20 students Chapter 1: Thinking Like an Economist Slide 10
MB MC Chapter 1: Thinking Like an Economist Slide 10 Economics: Studying Choice In a World of Scarcity ◼ Choosing the Optimal Class Size Revisited ⚫ Assumptions: ◆Two class sizes: 100 and 20 ◆Introductory economics classes have 100 students ⚫ Question ◆Should the class size be reduced to 20 students?