I. Basic Terms
     A. Economics is the social science concerned with the use of scarce resources like land and labor
          to fulfill unlimited human wants.
     B. Resources are the inputs, want satisfaction is the output
     C. Key Concepts
         1. Scarcity of resources results in the need for choices by participants.
         2  Participants, buyers and sellers, exhibit purposeful behavior to enhance their own rational self interest.
         3. Marginal analysis where the change in benefit received is balanced with the change in cost is a common purposeful behavior.
     D. Economic methodology 
         1. Positive Economics 
             a. What something is 
             b. Objective, can be measured
             c. Example: measuring disposable personal income which is an individual's salary after taxes
        2. Normative Economics
            a. What something ought to be 
            b. Subjective, difficult to measure 
            c. Requires value judgments by citizens, Political Action Committees (PAC's), politicians, economists, etc.
            d. Examples: should the minimum wage be increased, should defense spending increase and social spending be lowered
        3. Descriptive Economics
            a. Looking at the real-world to develop Economic Theory
            b. Economic Theory
               1. Generalizations concerning economic behavior based upon real-world observations, empirical by nature
               2. Economic theories are objective "positive economics"
               3. Assumes behavior is rational and economic (self-serving)
               4. Example: as the price of a product increases, consumers tend to buy less
           c. Economic Policy
              1. Application of economic theory to solve economic problems
              2. Economic policies are subjective, "normative economics".
              3. How society makes economic choices such as in the 1980's when
                  a. spending for the elderly (Social Security) increased 
                  b. spending for children (Head Start) decreased 
           d. Economic Model
              1. A simplified representation of real-world economic activity
              2. Requires Ceteris Paribus: Latin for holding other economic variables constant
              3. Models such as the Production Possibility Curve explained in the next chapter provide 
                  a simplified description of how some aspect of an economy works.
   


     E. Economic Glossary from Amosweb
     F.  Economics The Library of Economics and Liberty has a concise economics Encyclopedia at the bottom of the page.
     G. Our Economics Learning Center has information for students, teachers, an professionals.
 

II. Economic goals of the United States
     A. Economic growth
     B. Full employment of all economic resources
     C. Price stability (low inflation)
     D. Positive balance of payments (international flow of dollars)
     E. Economic freedom
     F. Equitable distribution of income
    G. Economic security (if you have A through F, you have G)
    H. Economic Report of the President gives the President's view on achieving these goals.

III. The study of economics is divided into two disciplines.

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