Choice in a World of Scarcity
Explore the principles of choice in the face of scarcity, budget constraints, opportunity cost, sunk costs, marginal decision-making, and productive and allocative efficiency, among others, in order to understand how individuals and society make decisions and why trade-offs are necessary.
Choice in a World of Scarcity
How Individuals Make Choices Based On Their Budget Constraint
The Concept of Opportunity Cost
Identifying Opportunity Cost
Marginal Decision-Making and Diminishing Marginal Utility
Sunk Costs
From a Model With Two Goods to One of Many Goods
Key Concepts and Summary
The Production Possibilities Frontier and Social Choices
The Shape of the PPF and the Law of Diminishing Returns
Productive Efficiency and Allocative Efficiency
Why Society Must Choose
The PPF and Comparative Advantage
Key Concepts and Summary
First Objection: People, Firms, and Society Do Not Act Like This
Second Objection: People, Firms, and Society Should Not Act This Way
Key Concepts and Summary