By William A. McEachern
Deliver economics to existence with wealthy, useful examples that make suggestions transparent and interesting. modern ECONOMICS blends financial services and academic insights with finished content material, sound tutorial layout, and huge print and media instructing instruments. This new version now comprises chapters overlaying own finance, together with info on coping with funds and being a in charge customer.
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Additional resources for Contemporary Economics , Second Edition
Think Critically 8. gov. Explain how unemployment relates to both market economics and national economics. 9. Marketing Examine some of the advertising that a college or university uses to try to convince new students to apply for admission. Explain how this advertising is intended to help potential students make rational choices. 2 Economic Theory 17 movers &shakers SUPPLIED PHOTO Christopher Curtis Children’s Book Author For 13 years after high school graduation, Christopher Curtis worked on an assembly line.
Source: “As the Dow Average Goes, So Goes Americans’ Economic Confidence,” Gallup Business Monitor, October, 2002. 10 CHAPTER 1 What Is Economics? The Role of Theory One way to strip down reality is by using simplifying assumptions. Economists develop theories, or models, to help explain economic behavior. An economic theory, or economic model, is a simplification of economic reality that is used to make predictions about the real world. Thus the goal of economic theory is to make predictions about the real world, such as what happens to consumption of Pepsi when its price increases.
You can think of opportunity cost as the opportunity lost. Sometimes opportunity cost can be measured in dollar terms. However, as you shall see, money usually captures only part of opportunity cost. Estimate Opportunity Cost Only the individual decision maker can select the most attractive alternative. ” If you give up an evening of pizza and conversation with friends to work on a term paper, you will never know the exact value of what you gave up. You know only what you expected. You expected the value of working on that paper to exceed the value of the best alternative.