Chapter 1 - What is Economics?

Economics

The common-sense science of how and why people, businesses, and governments make the choices they do.

Scarcity

Resources are limited in quantity, preventing us from obtaining everything we want.

Contentment

Curbing unlimited wants and living with limited resources.

Stewardship

Using wisely and well what God has given you.

Intrinsic value

A thing is valuable because of the nature of the product.

Subjective value

An object’s usefulness to the buyer determines its worth.

Opportunity cost

The satisfaction you give up or the regret you experience for not choosing differently

Microeconomics

Deals with choices made by individual units.

Macroeconomics

Examines large-scale economic choices and issues.

Positive economics

The approach of observing economic choices and predicting economic events.

Normative economics

Refers to making value judgments about existing or proposed economic policies.

Util

An economic term for an imaginary unit of satisfaction.

Economic Cost

The value people place on a good or service

Good

Any tangible thing that has a measurable life span

Services

any intangible function produced by useful labor

Nuisance good

Items that bear a negative economic cost

Recycling

Turning nuisance goods into economic goods

Free Goods

items provided freely by God in nature

Free Services

Services provided freely by God in nature

Diamond Water Paradox

the riddle that asks which is more valuable, a handful of diamonds or a glass of water

Utility

Usefulness

Opportunity Benefit

The satisfaction a person receives from a choice