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Lesson 1-1
Name: ___________________
Economics: The study of the ways in which a society decides to use its ________ ____________ to satisfy __________
Scarcity: ______________ relative to _______.
The Nature of Economics: The study of Scarcity
a. The problem of _________ scarcity is a ____________ one
b. Economists use a ______-__________ _____________ approach to help resolve problems
c. They analyze the relationship between the ________ of and _________ for _______ and __________, and
the ways in which goods are produced, __________, and ____________ within an economic system
d. The economist’s primary role is to figure out the _______________ of alternative courses of action
e. When you think like an economist, you should attempt to separate your own _______ and beliefs from your
analytical thinking about economic problems
__________ reasoning involves the use of specific facts to generate a general law, whereas __________
reasoning involves drawing conclusions about events according to a particular law that has already been
established. Because economics is a ________ science and not a ________ science, such as physics or
chemistry, economists cannot test their hypothesis under controlled laboratory conditions
g. Often there are problems and ___________ encountered when making these decisions, and sometimes the
gov’t needs to ___________ in the process.
Scarcity and Choice
a. To say there is scarcity of something simply means that the amount that is available is ____________
b. Obviously, there will be different ________ of scarcity
c. The more scarce something is, the higher will be its economic _______ - its ______, what you have to give
up for it. If something is not scarce, and enough is available for all possible users, there is no need to
economise, to choose the best use and to __________ it for that purpose. Such things are called ‘______
_______’. ______ is sometimes a free good and _____ is usually a free good.
d. 2 conditions – People must _____ the item, the amount of it must be __________
e. Some things have a ________ rather than a __________ economic value (eg, _________ air or water), and
we may be willing to pay someone to get rid of them. The question of _____ should pay such a cost is an
interesting one. Such questions can be answered only after a party decides what is ‘right’, ‘__________’, or
fair or makes some other _______ judgement.