Chapter 1 Limits, Alternatives And Choices.

CHAPTER 1: Limits, alternatives and choices Scarcity and choice. Limited goods and services Limited time Economics It is the study of how people, organisations, and businesses make social decisions to maximise their degree of enjoyment in times of shortage. A punishment or a reward could be used as an incentive. The primary source of economic issues is scarcity. The best way to describe economics is as the study of how individuals, organisations, governments, and societies come to decisions about scarcity. Economists note that both the wealthy and the impoverished must deal with scarcity. Economics is the study of the decisions we make in response to scarcity. Scarcity is a notion that pertains to both money and time. People must make decisions because of scarcity. Examples of microeconomics. The causes of the average price increase The individual consumer's purchasing decisions. Researching how prices are set in specific markets. An examination of how various decision-making units behave. The effect rent caps have on the availability of units. How a higher cigarette tax affects the sale of cigarettes. The choices a company makes regarding recruiting. The difference between microeconomics and macroeconomics Macroeconomics examines the decisions made by businesses and individuals, while microeconomics focuses