IN THIS CHAPTER YOU WILL Learn that economics is about the allocation of scarce resources Examine some of the tradeoffs that people face 费足 Learn the meaning of nity marginal reasoning when making decisions Discuss how TEN PRINCIPLES incentives affect people's behavior OF ECONOMIC S Consider why trade among people or The word economy comes from the Greek word for"one who manages a house. nations can be good hold. At first, this origin might seem peculiar. But, in fact, households and for everyone economies have much in common A household faces many decisions. It must decide which members of the household do which tasks and what each member gets in return: Who cooks din ner? Who does the laundry? Who gets the extra dessert at dinner? Who gets to Discuss why markets choose what Tv show to watch? In short the household must allocate its scarce re are a good, but not ources among its various members, taking into account each member's abilities perfect, way to efforts, and desires allocate resources Like a household, a society faces many decisions. A society must 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 comlrachines)to various jobs, nter software. Once soci- Learn what ety has allocated people (as well as land, buildings, and determines some trends in the overall economy 3IN THIS CHAPTER YOU WILL . . . Discuss how incentives affect people’s behavior Learn the meaning of opportunity cost Learn that economics is about the allocation of scarce resources Examine some of the tradeoffs that people face See how to use marginal reasoning when making decisions The word economy comes from the Greek word for “one who manages a house￾hold.” At first, this origin might seem peculiar. But, in fact, households and economies have much in common. A household faces many decisions. It must decide which members of the household do which tasks and what each member gets in return: Who cooks din￾ner? Who does the laundry? Who gets the extra dessert at dinner? Who gets to choose what TV show to watch? In short, the household must allocate its scarce re￾sources among its various members, taking into account each member’s abilities, efforts, and desires. Like a household, a society faces many decisions. A society must 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 soci￾ety has allocated people (as well as land, buildings, and machines) to various jobs, TEN PRINCIPLES OF ECONOMICS 3 Consider why trade among people or nations can be good for everyone Discuss why markets are a good, but not perfect, way to allocate resources Learn what determines some trends in the overall economy