Lecture Principles of economics (Asia Global Edition) - Chapter 1

– A rational person has well defined goals and tries to. fulfill those goals as best they can[r]

Thinking Like an Economist

Chapter 1

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Learning Objectives

when applying the Cost-Benefit Principle

inconsistently

The Scarcity Principle

The Scarcity Principle:

Examples

The Cost-Benefit Principle

are at least as great as the extra costs

Applying the Cost – Benefit

Principle

fulfill those goals as best they can

item?

from buying the item in town

Cost – Benefit Principle

Examples

Economic Surplus

to its benefit minus its costs

Opportunity Cost

• Opportunity cost is the value of what must

be foregone in order to undertake an activity

movies

possible activities

alternative

Economic Models

essential?

likely

more likely