SB 101 Study Guide - Quiz Guide: Ground Beef, Insulin, Deadweight Loss
Document Summary
Scarcity: a situation in which unlimited wants exceed the limited resources available to fulfill those wants; even though our wants are unlimited, the resources available to fulfill those wants are limited. Firms and the government must attain their goals with limited resources. Economics: the study of the choices consumers, business managers, and government officials make to attain their goals, given their scarce resources. Economic models: simplified versions of reality used to analyze real-world economic situations. Market: a group of buyers and sellers of a good or service and the institution or arrangement by which they come together to trade; ex. Markets for smartphones, houses, haircuts, stocks and bonds, and labor. Economists assume that consumers and firms use all available information as they act to achieve their goals. Rational individuals weigh the benefits and costs of each action, and they choose an action only if the benefits outweigh the costs.
