Topic 1: Basic Concepts
Key Points
- 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.
Videos
Choice and Scarcity
Choice and Opportunity Cost
Choice and Incentives
Choice and Fundamental Allocation Questions