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A household faces many decisions. It must decide which household members do
which tasks and what each memeberreceives in return: Who cooks dinner? Who
does laundry? Who gets the extra dessert at dinner? Who gets to drive the car?
In short, a household must allocate its scarce resources (time, dessert, car
mileage) among its various members, taking into account each memeber's
abilities, efforts, and desires.

Like a household, a society faces many decisions. It must find some way to
decide what jobs will be done and who will do them. It needs some people to
grow food, other people to make clothing, and still others to design computer
software. Once society has allocate the goods and services they produce. It
must decide who will eat caviar and who will ear potatoes. It must decide who
will drive a tesla and who will take the bus.

The mangement of society's resources is important because resources are scare.
Scarcity means that society has limited resources and therefore cannot produce
all the goods and services people wish to have. Just as each member of a
household cannot get everything she wants, each individual in a society cannot
attain the highest standard of living to whcih she might aspire.


Economics is the study of how society manages its scarce resources. In most
societies, resources are allocated not by an all-powerful dictator but through
the combined choices of millions of households and firms. Economists,
therefore, study how people make decisions: how much they work, what they buy,
how much they save, and how they invest their saving.

Economists also study how people interact with one another. For instance, they
examine how the multitude of buyers and sellers of a good together determine
the price at which the good is sold and the quantity that is sold. FInally,
economists analyze the forces and trends that affet the economy as a whole,
including the growth in average income, the fraction of the population that
cannot find work, and the rate at which prices are rising.

The study of economics has many facets, but it is unified by several central
ideas. In this chapter, we look at Ten Principles of Economics. Don't worry if
you don't understand them all at first or if you aren't completely convinced.
We explore these ideas more fully in later chapters. The ten principles are
introduced here to give you an overview of what economics is all about.


There is no mystery to what an economy is. Whether we are talking about the
economy of Los Angeles, the United States, or the whole world, an economy is
just a group of people dealing with one another as they go about their lives.
Because the behavior of an economy reflects the behavior of the individuals
who make up the economy, we being our study of economis with four principles
about individual decision making.

You may have heard the old saying, "There aint no such thing as free lunch."
Grammar aside, there is much truth to this adage. TO get something that we
like, we usually have to give up something else that we also like. Making
decisions requires tading off one goal against another.

Consider a student who must decide how to allocate her most valuable resourcce
- her time. She can spnd all of her time studying economics, spend all of it
studying psychology, or divide it between the two fields For every hour she
studies one subject, she gives up an hour she could have used studying the
other. And for every hour she spends studying, she gives up an hour she could
have spent napping, bike riding, watching TV, or working at her part-time job
for some extra spending money.

No lines are longer than 80 characters, TYVM. Other specified properties aren't being scored automatically at this time so this is not necessarily good news...