Essay Chapter 1 Slides

Submitted By dwbias
Words: 2714
Pages: 11

Median Earnings, by Education

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PowerPoint Slides prepared by:
Andreea CHIRITESCU
Eastern Illinois University
© 2015 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

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Ten Principles of Economics

PowerPoint Slides prepared by:
Andreea CHIRITESCU
Eastern Illinois University
© 2015 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

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Ten Principles of Economics
• Economy, “oikonomos” (Greek)
– “One who manages a household”
– Households and economies have much in common • Households face many decisions
– Allocate scarce resources
• Ability, effort, and desire

• Society faces many decisions
– Allocate resources and output
© 2015 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

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Ten Principles of Economics
• Resources are scarce
• Scarcity
– The limited nature of society’s resources
– Society has limited resources and therefore cannot produce all the goods and services people wish to have

• Economics
– How society manages its scarce resources
– How people make decisions
© 2015 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

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Ten Principles of Economics
• Economists study:
– How people make decisions
• Work, buy, save, invest

– How people interact with one another
– Analyze forces and trends that affect the economy as a whole
• Growth in average income
• Fraction of the population that cannot find

work
• Rate at which prices are rising
© 2015 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

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Ten Principles of Economics
• How people make decisions
1. People face trade-offs
2. The cost of something is what you give up to get it
3. Rational people think at the margin
4. People respond to incentives

© 2015 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

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Ten Principles of Economics
• How people interact
5. Trade can make everyone better off
6. Markets are usually a good way to organize economic activity
7. Governments can sometimes improve market outcomes

© 2015 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

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Ten Principles of Economics
• How the economy as a whole works
8. A country’s standard of living depends on its ability to produce goods and services
9. Prices rise when the government prints too much money
10. Society faces a short-run trade-off between inflation and unemployment

© 2015 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

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How People Make Decisions, #1
Principle