Summary 1
1. Economics is the scientific study of people and institutions from the point of view of how they produce and consume goods and services and face the problem of scarcity.
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2. Microeconomics looks at the interactions of producers and consumers in individual markets.
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3. Macroeconomics is the study of the economy as a whole, and is concerned with aggregates.
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4. Economists often disagree, but they do agree on a large body of economic theory.
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5. Economic theory is an abstract way of thinking that allows the development of principles, or tools, that can be used to study complex social issues.
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6. The self-interest hypothesis is a very basic assumption of economic theory. Although Economists recognize that economic behavior is a complex process, it is assumed in economics that human beings pursue their own self-interest.
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7. The economic approach is positive, or nonnormative; it cant predict the future, but is can make statements of an if A then B type.
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8. Because of their individualistic approach, economists tend to look to the market to solve social problems. In analyzing problems, economists spend a great deal of time clarifying options and looking at costs,. In examining possibilities for substitution, economists look at costs and benefits at the margin.
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9. The menu of topics to which we can apply economic analysis is endless.
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