Intermediate MicroEconomics: Chapter 1 Book Terms

What is the definition of Economics?
The study of the choices we make among our many wants and desires given our limited resources.

Why does scarcity force us to make choices?
Scarcity- the fact that our wants exceed what our resources can produce- means we are forced to make choices on how best to use these limited resources.

Why are choices costly?
In the world of scarcity, whenever we choose one option, we also choose to do without something else that we also desire. The want that we choose not to satisfy is the opportunity cost of that choice.

What is the economic problem?
Scarcity forces us to choose, and choices are costly because we must give up other opportunities we value. This is the economic problem. Every individual, business, social, religious, and governmental organization faces the economic problem of scarcity, choices, and costs.

Why do even “non-economic” issues have an economic dimension?
Even apparently non-economic issues have an economic dimension because economics concerns any-thing worthwhile to some human being (including love, friendship, charity, ect.) and the choices we make among those things we value.