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1. Economics- the study of the behavior of people and institutions in production, distribution, and consumption of scarce goods. 1. Economic Theories- generalizations based upon a careful observation of facts. 2. Normative Statement- based upon value judgments. 3. Positive Statement- what is 4. Concept of Economic Efficiency- concerned w/ obtaining max output from available resources. 5. Fundamental Problem of Econ.- scarcity of productive resources relative to material wants. 6. Econ. Resources- Factors of Production 7. Market- an institution which brings together buyers and sellers. 8. When an economy is operating w/ max efficiency, the production of more of “A” and less of “B” 9. Money payments made to land owners: rent, wages, interest, and profits. 10. Production Possibility Curve- all resources of an economy are in use, more of one only if less of another.
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