2.1 How Individuals Make Choices Based on Their Budget Constraint Economists see the real world as one of scarcity: that is, a world in which people’s desires exceed what is possible. As a result, economic behavior involves tradeoffs in which individuals,…
Learning Objectives By the end of this section, you will be able to: It is one thing to understand the economic approach to decision-making and another thing to feel comfortable applying it. The sources of discomfort typically fall into two…
Learning Objectives By the end of this section, you will be able to: Just as individuals cannot have everything they want and must instead make choices, society as a whole cannot have everything it might want, either. This section of…
Learning Objectives By the end of this section, you will be able to: Consider the typical consumer’s budget problem. Consumers have a limited amount of income to spend on the things they need and want. Suppose Alphonso has $10 in…
Figure 2.1 Choices and Tradeoffs In general, the higher the degree, the higher the salary, so why aren’t more people pursuing higher degrees? The short answer: choices and tradeoffs. (Credit: modification of “College of DuPage Commencement 2018 107” by COD Newsroom/Flickr, CC BY…
1.1 What Is Economics, and Why Is It Important? Economics seeks to solve the problem of scarcity, which is when human wants for goods and services exceed the available supply. A modern economy displays a division of labor, in which people…
Learning Objectives By the end of this section, you will be able to: Think about what a complex system a modern economy is. It includes all production of goods and services, all buying and selling, all employment. The economic life…
Learning Objectives By the end of this section, you will be able to: Figure 1.6 John Maynard Keynes One of the most influential economists in modern times was John Maynard Keynes. (Credit: “John Maynard Keynes” by IMF/Wikimedia Commons, Public Domain) John Maynard Keynes (1883–1946),…
Learning Objectives By the end of this section, you will be able to: Economics is concerned with the well-being of all people, including those with jobs and those without jobs, as well as those with high incomes and those with low incomes.…
Learning Objectives By the end of this section, you will be able to: Economics is the study of how humans make decisions in the face of scarcity. These can be individual decisions, family decisions, business decisions or societal decisions. If you…