ecomics
...APTER 2 SCARCITY, CHOICE, AND ECONOMIC SYSTEMS The objectives of this chapter are to: 1. Explain the concept of opportunity cost, emphasizing that the money price we pay for something is not the same as its cost. 2. Construct a production possibilities frontier and use it to explain the concepts of technical inefficiency, unemployment, and the law of increasing opportunity cost. 3. Explain the sources of the gains from specialization. 4. Define comparative advantage and absolute advantage and explain why comparative advantage should be used to maximize production. 5. Describe the problems that all economies face in allocating scarce resources. 6. Describe the three methods of resource allocation and give examples of how each method is used in the United States. 7. Contrast three different methods of resource ownership and give examples of each. 8. Describe the four basic types of economic systems (systems of resource ownership and resource allocation), and explain why this course emphasizes the study of market capitalism. CHAPTER 3 SUPPLY AND DEMAND The objectives of this chapter are to: 1. Descr...