- Define scarcity
- State why scarcity means people must choose
- Learn about opportunity cost.
- Understand the role of rational self-interest in decision-making
- Analyze how opportunity cost affects rational choices
- State how and why people generally respond predictably to incentives.
- Learn the three fundamental resource allocation questions.
- Understand the relationship between resource allocation and economic efficiency.
- Chapter 1: Introduction and section 1.1
- Opportunity costs example: “Free” medical care is not free
- This article highlights the opportunity costs of building a sports stadium.
- Incentives/rationality example: Crime doesn’t pay, but lowering it might.