1. Chapter 1: Introduction – The Study of Economics

2. The Study of Economics zEconomics -- The study of the production, allocation, and distribution of (limited) resources to most efficiently meet (unlimited) human wants and needs.

3. Microeconomics Versus Macroeconomics zMicroeconomics -- The study of economic decisions of individuals and firms. zMacroeconomics -- The study of economic decisions in the economy as a whole (aggregates or totals).

4. Scarcity – A Fundamental Economic Property zKey – Resources are finite or scarce, especially relative to human wants and needs. zResources -- money -- time -- environmental resources

5. Scarcity and Opportunity Cost zOpportunity Cost – The cost of pursuing a given choice or decision, based upon the best alternative given up. Using scarce resources in everything we do.

6. Economic Decisions: Theories and Models zTheory -- An assertion about the major causes of a given behavior, done in order to predict outcomes. zModel -- A formalization of a theory, done to make concise predictions.

7. The Role of Assumptions zTheories and models make simplifying assumptions zThe assumptions emphasize the main causes without making the theory/model overly cumbersome.  Evaluating a theory and model: How closely do these assumptions approximate reality?