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Basic concepts

Lesson Objectives

  1. Define scarcity
  2. State why scarcity means people must choose
  3. Learn about opportunity cost.
  4. Understand the role of rational self-interest in decision-making
  5. Analyze how opportunity cost affects rational choices
  6. State how and why people generally respond predictably to incentives.
  7. Learn the three fundamental resource allocation questions.
  8. Understand the relationship between resource allocation and economic efficiency.

Textbook reading

  • Chapter 1: Introduction and section 1.1

Non-textbook material

Videos

Video: Choice and Scarcity
Video Questions, Answers & Updates
Video: Choice and Opportunity Cost
Video Questions, Answers & Updates
Video: Choice and Incentives
Video Questions, Answers & Updates
Video: Choice and Fundamental Allocation Questions
Video Questions, Answers & Updates

Study aids