Part 1 - Introduction
Chapter 1 – The Principles of Economics
Scarcity = the limited nature of society's resources
Economics = the study of how society manages its scarce resources
• “Economy” is Greek for “managing a household”
HOW PEOPLE MAKE DECISIONS
1.People Face Tradeoffs
Making decisions requires trading off one goal against another. (Es geht um Kompromisse; man opfert eine Alternative um der anderen Willen)
A classic tradeoff is between “guns and butter” (military vs. living standard) • Leisure time vs. work
• Food vs. clothing
• Efficienty vs. equity
Efficiency = the property of society getting the most it can from its scarce resources.
Equity = the property of...