Chapter 1: Reading Guide
- Consider the textbook definition of economics from page three. If someone told you that a course in economics is the same as a course in business would you agree or disagree with them? Justify your answer.
- What is the concept of scarcity? Pick a good or service from your life? Is it “scarce” in economic terms? Explain why or why not. Draw upon your definition of scarcity to do so.
- Economists argue that all economic decisions have “opportunity costs.” What is meant by this concept? Explain one example of how opportunity cost impacted you this past summer.
- Consider the section entitled “economic methodology.” Do you think that economics is more of a science or more of an art? Explain.
- Economists rely heavily on the assumption of “Ceteris Paribus” in developing economic theories. What does this mean? Why is it important to observe this assumption? What problems may result from failing to do so?
- Identify the 8 macroeconomic goals of a market economy? Are there any goals that seem contradictory to you? Explain.
- Contrast microeconomics and macroeconomics. Provide an example of an issue that may be studies in each field.
- Contrast positive economics and normative economics. Provide an example of a positive statement and a normative statement.
- Explain how two variables may be “correlated” without necessarily having a cause/effect relationship?
- On a recent trip to Carvel you took advantage of the “Buy one Get one Free” sundae deal on Wednesdays. Economists would argue that no such deal could exist because “nothing is free.” Who is correct? Explain.
Vocabulary Terms
Economics
Bias
Loaded Terminology
Scarcity
TINSTAFL
Tradeoff
Microeconomics
Macroeconomics
Ceteris Parabus
Correlation vs Causation
Microeconomics
Macroeconomics
Positive Economics
Normative Economics
Utility
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