The Public Sector 6 is funded. The Public Sector 6 is funded. The Public Sector 20 is funded.

There is supply and outsourcing.

There is supply and outsourcing.

In today's fast-paced, multitasking environment, students must be convinced that taking the time to read a text, utilize all of its study features, and learn the fundamental concepts it presents is a concrete payoff. As pro fessional economists, we must constantly search for new ways to demonstrate how powerful economic analysis can be to our students. We have to convince them that economic tools are useful for everyone.

I have found that presenting students with current and relevant examples is the most effective way of motivating them to read an economics textbook and learn the essential tools that economists have to offer.

There is a new feature called "Why Not" in every chapter.

Significant sections of this text have been revised.

I continue to facilitate assessment of student learning by means of "Quick Quiz" boxes that appear throughout each chapter and Clicker/Personal Response System questions available for use by instructors in PowerPoint presentations that accompany the book. Pearson and I are expanding the assessment aspect of MyEconLab. 100 percent of end-of-chapter exercises are assignable in MyEconLab for greater flexibility in assessing students, as in the last edition. Current events coverage and analysis are provided to students through weekly news and ABC News clips.

I want students to know that they will be able to apply to every aspect of their lives. I believe that once students are given the tools of economic analysis, they will appreciate their classroom experiences for years to come.

The developments have been cutting-edge.

It would take a high school degree to earn a lifetime income.

The amount of education and training people get affects their prices and the distribution of incomes across the society.

Significant declines in stock prices occurred during periods of depression.

President Obama and leaders in Congress agree that the 888-282-0476 888-282-0476 888-282-0476 888-282-0476 888-282-0476 888-282-0476 888-282-0476 888-282-0476 888-282-0476 888-282-0476 888-282-0476 888-282-0476 888-282-0476 888-282-0476 888-282-0476 888-282-0476 888-282-0476 888-282-0476 888-282-0476 888-282-0476 888-282-0476 888-282-0476 888-282-0476 888-282-0476 888-282-0476 888-282-0476 888-282-0476 888-282-0476 888-282-0476 888-282-0476 888-282-0476 888-282-0476 888-282-0476 888-282-0476 888-282-0476 888-282-0476 888-282-0476 888-282-0476 888-282-0476 888-282-0476 888-282-0476 888-282-0476 888-282-0476 888-282-0476 888-282-0476 888-282-0476 888-282-0476 888-282-0476 888-282-0476 Their goal is to reduce emissions to 2005 levels by no later than 2014, which is equivalent to the reduction that occurred during the Great Recession. The longer-term goal is to reduce emissions by 30 percent by 2030.

The decline in production of capital goods would reduce future economic growth.

A commission funded by grants from the World Bank, the Hewlett Founda growth periods, and several national governments recently studied 13 nations that, at ers to flows of imports and exports across national borders. Over the course of 25 years, periods of high economic growth ended for many nations when the government's gov of at least 7 percent. The countries that began restricting international trade were Brazil, China, and Hong Kong.

Many politicians were surprised by the fact that all 13 countries were open to international trade.

The Indian government requires farmers to sell their beans to a middleman who resells them in wholesale markets. With this information in their possession, farmers are able to emphasize the importance of price negotiations because the middleman has an advantage because they bargain for better prices on their crops. ITC's kiosks have up-to-the-minute data about wholesale soybean prices. A 33 increase in Indian soybean farmers' profits and international perspectives and policy has resulted in a 19 percent increase in soybean production for many Indian farmers. For fear of being taken by the middleman, the boost in the supply has been deterred.

The new and revised tools help students focus on the cen tral ideas in economics.

A current application captures students' attention at the beginning of the chapter and is repeated in more depth at the end.

Key factors that influence the institutions were typically less than $45 billion.

25 times, to a level over $1 trillion.

Understand the equation of exchange.

The U.S. net public debt-GDP ratio is more than twice as high as it was in 2000.

Section N: News is explained by the fact that the U.S. government's debt-GDP ratio is so high.

You should know what to know after reading this chapter.

They want to practice asset demand.

The Fed sells U.S. government bonds.

Reserve buyers can purchase bonds.

The market interest rate declines when the Fed purchases bonds because of the inverse relationship between the market price of existing bonds and the prevailing rate of interest.

The answers can be found on page 16.

What and how to move on are the three basic economic questions. The answers are at the end of how individuals choose among alternatives to satisfy their needs, how items will be produced, and who will make them. The two opposing chapters had more practice questions.

In economics, we assume that people don't try to cause the two main branches of economics to make decisions that will leave them worse off.

He hopes that eventually the notes will be prized by the highest amount of money in recorded history. Zimbabwe's one-trillion-dollar notes are so abundant that their market values may never exceed what he paid for them.

Stopping Students' Thursday Night lost more than half of its value in a single day. Each note was bought at a price of less than 20 U.S. dollars for each party.

Apple put Adobe on hold, which could eventually lead to more than 100 U.S. dollars.

The residents of Zimbabwe used currency notes to buy goods and services after the hyperinflation.

There are topics about the U.S. economy.

Instructors can manage all assessment needs in one program with comprehensive homework, quiz, test, and tutorial options.

Instructors can now choose to create their own assignments or choose to create a pre-packaged course with homework, quizzes, and tests already set up.

All end-of-chapter problems are assignable and automatically graded in MyEconLab, and there are additional exercises to choose from.

Instructors can use the Custom Exercise Builder to create their own problems, or choose questions from the Test Item File.

The Gradebook records each student's performance and time spent on the Tests and Study Plan, and creates reports by student or chapter.

Economics in the News is a solution to bring current news into the classroom. This feature is updated weekly during the academic year.

ABC news videos address current topics and are available for classroom use.

There are videos with assignable questions tied to the "Issues & Applications" features in the text.

Experiments in MyEconLab promote active learning and mastery of economic concepts. Pearson's experiments program is easy to use.

Single-player experiments allow your students to play an experiment against virtual players from anywhere at any time with an Internet connection.

You can assign and manage real-time experiments with your class.

Pre- and post- questions for each experiment are available for assignment in MyEconLab.

Students have control of their own learning through a collection of tests, practice, and study tools. Students can practice what they have learned, test their understanding, and identify areas for further work with two Sample Tests per chapter.

Each student's performance on homework, quizzes, and tests is used to create a Study Plan that shows where the student needs further study.

Learning aids such as step-by-step guided solutions, a graphing tool, content specific links to the eText, animated graphs, video clips of the author, and glossary flashcards help students master the material.

Tools for success are provided by supplemental resources.

The accuracy of the problems and solutions in the revised and updated Test Item Files is ensured by the significant revision process by the authors. The questions are connected to the general knowledge and skill guidelines found in the Association to Advance Collegiate Schools of Business.

The Study Guide was updated by David VanHoose and was written by Roger LeRoy Miller.

Pearson course management systems include a link to the MyEconLab software that hosts all of the course materials.

You can save time and hassle with a digital textbook that allows you to search the most relevant content at the moment you need it, even as students save money.

Some professors have been asked by my publisher to take part in a more detailed review of this edition. I hope that you all accept my sincere appreciation for the work that you have done.

The editorial team at Pearson helped me. I was pushed by my editor. Carolyn Terbush was the assistant editor on this project.

I was fortunate enough to work with my production supervisor, Kathryn Dinovo.

Jon Boylan was able to create a new look that still retained the traditional feel of the text. The years of experience of John Orr helped me. Pat Lewis once again provided copyediting and proof services. Alison Eusden guaranteed revised ancillaries for this edition. I would like to thank them for their continued marketing efforts.

More emphasis has been placed on online and other media materials.

MyEconLab was fully functional, thanks to the hard work of Susan andMelissa Honig. Noel Lotz helped develop new content for MyEconLab.

The three test item files were authored by Jim Lee of Texas A&M-Corpus Christi and Paul Graf of Indiana University- Bloomington. David VanHoose created study guides that were useful.

There are two people I owe a debt of gratitude to. After all of the typing and retyping of various drafts, Sue Jasin could probably teach a course in economics.

Discuss the difference between the level of government involvement in micro economics and macroeconomics in the nation's banking industry. Prior to the 2000s, owners of private banks decided how interest plays in economic analysis to pay the managers that they hired. Explain why economics is a science government agencies overrule salary offers and adjust the salaries of existing managers.

Before the Great Recession, the U.S. government had less direct control over financial companies.

The subject of economics is interesting to students. Self-interest is another reason.

You are 50 percent more likely to majors in economics than you are in chemistry.

There are rewards for engaging in an activity.

Predicting the choices that people will actually make is not enough for knowing that self-interest and incentives are central to any decision-making process. You have to develop a framework that will allow you to analyze solutions to each economic problem--whether you are trying to decide how much to study, which courses to take, whether to finish school, or whether the U.S. government should provide more grants to universities or raise taxes.

The framework gives you the power to make informed decisions about what is happening in the world. You can live your life without economic analysis being a part of your analytical framework. Most people do. Economic analysis can help you make better decisions, according to economists. Economic analysis can help you increase your competitive edge in the business world. For the rest of your life, you will be asked to make judgements about policies advocated by political parties. Some of the policies will deal with questions related to international economics, such as whether the U.S. government should encourage or discourage immigration, prevent foreign residents and firms from investing in port facilities or domestic banks, or restrict other countries from selling their goods here.

Taking an economics class will increase your understanding and pleasure when you watch the news on TV or read the newspaper, just as taking an art, music, or literature appreciation class will increase your pleasure when you view paintings, listen to concerts, or read novels.

People allocate their limited events. Human behavior is analyzed by all social sciences as opposed to physical resources.

Economics studies how people allocate their limited resources to satisfy their unlimited wants.

Goods and services used to be made to meet people's needs.

Goods and services that satisfy people's wants would be what people would buy.

Whenever an individual, a business, or a nation faces alternatives, a choice must be made, and economics helps us study how those choices are made. You have to decide how to spend your money. You have to decide how to spend your time. Depending on your company's limited funds, you may have to decide how much to spend on advertising and new product research.

In economics, we look at situations in which individuals choose how to do things, when to do them, and with whom to do them. The purpose of economics is to explain choices.

The study of decision making is done by individuals and firms.

Economic analysis studies the behavior of the economy as a whole. Changes inunemployment, general price level, and national income are some of the economywide phenomena it deals with.

Micro economic analysis is concerned with the effects of changes in the price of gasoline relative to other energy sources. It looks at the effects of new taxes on a product. How firms and consumers would react to price controls in the United States would be in the realm of micro economics. Microeconomics would be used to analyze the effects of higher wages brought about by a union strike.

Aggregate modern economic theory blends microeconomics and macroeconomics in Total amounts or quantities. Micro economic demand is the study of decision making by individuals and firms as the basis of expenditures throughout a nation.

Even though macroeconomic analysis focuses on the result of choices made by individuals and firms, they still do this.

How to allocate society's scarce determining the way in which scarce resources are used to satisfy human desires is one of the three questions.

For determining which items will be produced, there must be a mechanism.

There are many ways to make something. It's possible to use more labor and less capital. Producing an item with an aim to maximize the number of people employed is possible.

A decision must be made about the mix of resources used in production, the way in which they are organized, and how they are brought together at a particular location.

People value access to an item because they use scarce resources to produce it. Determining a mechanism for distributing produced items is an important issue for any society.

Every nation has its own economic system. The economic system of a nation affects how it answers the three basic economic questions.

Under control, this authority decides what items to produce, how many, how scarce resources will be, and who will be able to get the items.

In a command-and-control economic system, a government might decide that certain types of automobiles should be produced in certain numbers.

The government may issue specific rules for how to marshal resources to produce these vehicles, or it may even establish ownership over those resources so that it can make all such resource allocation decisions directly. The government will decide who will be allowed to use the vehicles.

All of the scarce resources used in production are owned by individuals and families under a pure price system. Choices about what and how many items to produce are left to private parties to decide on their own, as are decisions about how to go about producing those items. Individuals and families can allocate their own incomes to obtain produced items at prices established via privately organized mechanisms.

In Chapters 3 and 4 of the price system, you will learn about the terms under which people agree to make exchanges. Everyone in the price system knows which resources are scarce and which resources are plentiful.

The facilities used to produce automobiles are owned by individuals and families. They decide which types of automobiles to produce, how many of them to produce, and how to bring scarce resources together within their facilities to generate the desired production. Some people decide how much money they want to spend on cars.

Some nations lean toward centralized mechanisms of command and control and allow little scope fordecentralization. Other nations limit the extent to which a central authority dictates answers to the three basic economic questions, leaving people free to use a decentralized price system to generate their own answers.

A country may reach different decisions about how much to rely on command and control versus a price system to answer its three basic economic questions at different times. Until 2008, the people of the United States preferred to rely on a centralized price system to decide which cars to buy, how many to produce, and who to buy them from. The U.S. government is the majority owner of a large portion of the facilities used to manufacture automobiles.

Adam Smith articulated this central insight of economics in 1776.

The matrimo rate for Indian men working in the United States is almost 8 percent, but there are plenty of jobs. Finding brides back home in India has become more difficult as more Indian women are nial matches.

Many career-oriented Indian women were willing to marry Indian men employed by U.S. companies in the past. Why do you think fewer young men from India are going to the U.S.

There is a distinction between what people think about psychology and what they do. Economics looks at what people do with limited resources. In a world where people can be atypical in many ways, economists find it useful to focus on discovering the baseline. It's a good idea to know what happens on average.

We don't build our thinking on exceptions rather than on reality.

The example is of driving. You must estimate the speed of the car that you are going to pass, the speed of the oncoming cars, and the distance between your car and the oncoming cars. The rules of calculus would be used to apply a model to your behavior.

People will respond to changes in incentives if it is assumed that they never intentionally make decisions that will leave them worse off. Human behavior can be explained by how individuals respond to incentives over time.

To contemplate why the location that a gold star and certificates of achievement when they are young, to better producer chooses for filming a movie grades with accompanying promises of a " better life" as they get older, is a better choice than the location that a gold star and certificates of achievement when they Negative incentives affect our behavior as well.

The government gives everyone an incentive to own a golf cart. Golf cart sales have gone up in many states because of the tax credits.

The tax credits are a key selling point for dealers of golf carts.

One's wealth is not always measured in dollars and cents. Individuals seek many goals, not just increased wealth measured in monetary terms. The self-interest part of our economic-person assumption includes goals relating to prestige, friendship, love, power, helping others, creating works of art, and many other matters. In the pursuit of what makes them better off, individuals achieve the betterment of others around them. Individuals are assumed to want the ability to make decisions about how things around them are used. Even though it's for other people's benefit, the head of a charity will usually accept an additional contribution because it gives them control over how the money is used.

Self-interest doesn't rule out doing charitable acts. Giving gifts to relatives is considered a form of charity because it is in the self-interest of the person giving it.

Eighty-two percent of the cash value of the gift is given by aunts, uncles, grandparents, mothers, and fathers. He finds grand gifts to their college-aged loved ones.

The University of Pennsylvania has surveyed thousands of college students to find out the value of holiday gifts.

The answers can be found on page 16.

The three basic economic questions are what and how individuals choose among alternatives to satisfy their needs, how items are produced, and what people will buy if their for whom will items be produced. The two incomes were not the same.

In economics, we assume that people don't try to cause the two main branches of economics to make decisions that will leave them worse off.

Economics uses the same methods as other sciences, such as biology, physics, and chemistry. Economics uses models and theories like other sciences. There are differences between sciences. The basis for predictions and social sciences make little use of laboratory experiments.

Social scientists and economists usually have to look at what has already happened in the real world to test their theories.

A model, by definition, is not reality. It is not possible to make a realistic model. We can't account for every molecule and its position in physics.

If you know how to use major streets in the city, a map that only shows major streets is not faulty.

The map is the epitome of a model. A simplified representation is what it is. It's useful in making predictions about the world.

The map predicts that when you take Campus Avenue to the north, you always run into the campus. If a simple model can explain observed behavior in repeated settings just as well as a complex model, it is probably easier to use.

Every theory has to be based on a set of assumptions. The array of circumstances in which our model is most likely to be applicable are defined by assumptions. Columbus didn't accept the implications of the model because he didn't accept its assumptions. He assumed that the world was unchanging. The real-world test of his model was different from the flat-earth model. It was a test of the assumption of the flat-earth model.

Assumptions are used for reality. Imagine that the planners will say, "Get on I-5 going north." You can stay on it if you want to drive from your home in San Diego to San Francisco. The equipment is global-positioning system equipment.

The models you will be using in this text are similar to the simplified directions on a set of detailed maps that shows each city through which you will travel.

You can open each map and see how the freeway goes through each city.

Everything in the world seems to relate to everything else in the world. If we had to worry about the many other variables that might also enter the analysis, it would be impossible to separate the effects of changes in one variable on another.

An example of economics is taken from the assumption that nothing changes. One of the factors being studied is one of the most important.

We know that there are other factors involved in making purchases. Some of them have to do with income, some with tastes, and some with religious beliefs. When we look at the relationship between changes in prices and changes in how much people will purchase a product, we hold them constant.

We don't try to determine the usefulness of a model by evaluating how realistic its assumptions are. If the predictions are supported by real-world observations, the model is considered a good one.

The scientific approach to the analysis of the world around us requires that we consider evidence once we have determined that the model predicts real-world phenomena. The usefulness of a model is tested with evidence. This is the reason we call economics CHAPTER 1 # The Nature of Economics Why Not.

Donating blood is tiring and time- consuming, and from the fact that others see them sacrifice to do a good sometimes even painful activity that provides scarce, life deed, such as giving blood. Empirical studies show that people will mist if they see others offer their blood. Blood donors are rewarded for their contributions when others know that they are less likely to respond. Even though they can now receive a payment for making charitable donations, most individ drives still derive satisfaction from doing so.

Real-world data is used to evaluate the we are right. Economists often test their models.

The economist doesn't try to predict how people will think about a particular topic, such as a higher price of oil products, accelerated inflation, or higher taxes. The people who look at thought processes are psychologists and psychiatrists.

Some economists want to pay more attention to psychologists and psychiatrists. An alternative approach to economic analysis has been suggested.

People only care about their own satisfaction.

Their choices are always in line with their long-term goals.

They can consider every choice.

Behavioral economists suggest that people can't always pursue their best interests because they can't always see what's best for their interests. When they rely on other people, they must use simple rules of thumb to take into account other people's interests as well as their own.

Because every possible choice cannot be considered, an individual will tend to fall back on methods of making decisions that are simpler than trying to sort through every possibility.

A person may rationally settle into repetitive behaviors that an outside observer might conclude to be consistent with a rule of thumb if they face persistently predictable ranges of choices. If there is a major change in the environment that the individual faces, the person should continue to rely on a rule of thumb. Economists find that people respond to altered circumstances by fundamentally changing their behaviors. People make decisions that are in line with their interests and long-term objectives, according to economists.

The application of the assumption of rationality proposed by behavioral economists is not certain to alter the way in which economists construct models intended to better predict human decision making. Proponents of behavioral economics have not shown that paying attention to psychological thought processes can improve economic predictions.

The majority of economic analysis continues to rely on the rational ity assumption as the basis for constructing economic models. You will learn in Chapter 20 that advocates of behavioral economics continue to explore ways in which psychological elements might improve analysis of decision making by individual consumers.

That is a positive statement. It isn't a statement of anyone's values or feelings.

The analyses of many problems in the "hard" sciences such as physics and chemistry are value-free. Economists face a different problem.

They deal with the behavior of individuals.

We have expressed a value judgment. Remember that outcomes are either good or bad.

We all have a desire for different things. We have different values. We are simply saying what we want when we express a value judgment. We expect people to express differing values about how the world should be.

Positive economics is easy to define. Even though an author goes over the manuscript many times before it is printed, it is still difficult to catch all the unlabeled statements in a textbook. Do not think that a textbook author will be able to keep personal values out of the book.

The choice of which topics to include in an introductory textbook involves economics. There isn't a way to decide which topics to use in a textbook. When choices have to be made, the author's values make a difference. You might want to be aware of when you are engaging in normative as opposed to positive economic analysis. This text will help you with that task.

The answers can be found on page 16.

The hypothesis is that people are not quite nature a simplification of the real world. Rationality can be evaluated by bringing empirical evidence but using simple rules of thumb to decide on its predictions.

The assumption that economics is value-free and that all other things are equal is used by most models.

The movie producer was going to film the action assistance. He returned the scenes to North America. He found that by filming in Madrid, he could get millions of dollars in subsidies from the Spanish government. The total cost of making the movie to writers was reduced to just 15 million dollars before the movie was shown.

Berlin was able to offset the German subsidies.

This additional change has been responded to by Vollkammer.

The U.S. economic system relied on the price system before the late 2000s. The U.S. government has opted for more control. The U.S. banking system began the expansion of a command-and-N Price System control approach. This approach has spread to a number of industries in the U.S.

The U.S. government granted itself veto power over management decisions of U.S. banks to accept taxpayer-funded purchases of own. If the bank's owners try to make a lot of money.

The U.S. government regulates operations at the two firms. Congress dictated where the companies could open new.com/ch01.

The firms could keep the history of General GM and its dealerships.

You can make a list of all the government agencies that regulate the U.S. industries. Is it possible that the government created these agencies to oversee the process of obtaining health care for U.S. residents?

A complete replacement is not likely.

How to produce, and for whom to produce are some of the questions that can be asked.

You should know what to know after reading this chapter.

The study of economics is how indi economics, 2 1.2, 1.3 viduals make choices to satisfy wants.

What and how much will be pro economic system, how will items be produced, and for whom will items be produced are some of the questions asked in macroeconomics. The answers to the questions are provided by the type of economic system, either centralized command and control or the price system.

Video: The Economic Person: intentionally make decisions that would leave them Rational Self-Interest worse off. ABC News Video: Their self-interest can relate to monetary Economics of Higher Education and nonmonetary goals, such as love, prestige, and helping others.

The predictions of economic theories can be subject to empirical tests in which real-world data are used to decide whether or not to reject them.

Positive eco Normative and Positive nomic statements can be used.

Economics are both descriptive and predictive. Values are within the realm of economics, or how people think things ought to be.

Log in to MyEconLab, take a chapter test, and get a personalized study plan that tells you which concepts you understand and which ones you need to review. MyEconLab will give you further practice, as well as videos, animations, and guided solutions.

A student is considering whether to buy a text lowing issue as a micro economic issue, a book for a particular class macroeconomic issue, or not an economic issue.

Some people claim that the economic way of thinking doesn't apply to health care.

A model of an individual's choices is developed by a student's allocation of study time.

Consider two models for estimating, in advance of student, serious about her classes, and conscien an election, the shares of votes that will go to rival tious about her grades. Sally is involved with the candidates. According to one model, pollsters' sur however, in volunteer activities and an extracur veys of a randomly chosen set of registered voters. The centage of votes that each candidate will receive is based on what you read.

The bank was trying to figure out what fee to charge for responses about how they will vote and what fee to charge for expedited payments that will cast a ballot in the election. The model uses prices of financial assets to bind customers to avoid late fees on cable TV bills, electric bills, and the like, and the bank would transmit extra-speedily to enable it. To determine what fee customers were willing to pay in order to predict electoral outcomes. The bank conducted a survey about the final payments. They said they were willing to pay.

The two models for forecasting elecBounded rationality proposed by the toral results are more firmly based on the ration behavioral economics.

Based on your answer to Problem 1-12, categorize use rules of thumb, as suggested by the assumption each of the following conclusions is a positive analysis, even though they really result in positive analysis.

Raising the minimum rational, self-interested individuals respond to wage is the best way to increase the earnings of minimum wage.

Myrna has to earn every 10 exam points.

She will study one tion of health care in order to increase her graduation requirements.

Leonardo's decision will be best predicted by a coin toss. List one thing that might change and offset the ness suit or an inexpensive casual outfit to wear.

The price of laptop computers will go up.

Falling gasoline prices will result in more room and board for her at college.

The reduction of income tax rates will allow for two additional hours of work.

The Blinder, the Federal Reserve Bank of Minneapolis publica and Rivlin interviews can be assigned by going to www.econtoday.com/ch01.

Answer the following questions after reading the interviews of the economists.

A graph shows the relationship between variables. Even if nothing else is changing.

The dependent variable is weight.

A table is a list of numerical values showing the relationship between two or more variables. A graph is a visual representation of independent variables.

You will understand what graphs are and how to use them once you understand how a table can be converted to a graph.

Consider a realistic example. The table shows a pattern.

There are different ways in which variables can be related.

A person's weight and height are related.

There is a simple way in which two variables can be related.

There is a relationship between two variables. There is a relationship in panel (b) of Figure A-1.

A decrease in the other is associated with the creation of a Graph.

A line can be divided into segments based on a number.

The one is shown in Figure A-2.

The points on the line have numbers that increase in value from left to right.

The distance from 0 to 10 or the distance between 30 and 40 are shown on the number line. They are all equal to 1 inch.

The distance between 0 and 10 might represent 10 barrels of oil, or the distance from 0 to 40 might represent 40 barrels.

A distance of 1 inch could represent 10 units on one line but 5,000 units on another.

We can also make a vertical number line. Consider the one next to it.

The numbers are either negative or positive. All the line segments are the same.

We can express the relationships between variables graphically by drawing the horizontal and vertical lines on the same sheet of paper.

We drew them so that they intersect at each other's 0 point and that they are parallel to each other.

When you see a point on the line, you know that it is one number or one value.

Table A-2 should be considered alongside. The number of T-shirts purchased per week is given in column 2. An inverse relationship exists between these two variables, and as soon as we represent it on a graph, you will be able to see it.

We would be able to connect our observations with lettered points. The linear relationship shown in Figure A-5 holds for fractions of dollars and T-shirts if we make T-shirts perfectly divisible. The line that connects these points is shown in the graph on the bottom of the page.

The data from the table has been represented in the form of a graph.

Figure A-7 shows the quantities of shoes that a seller is willing to offer at different prices. In panel (a) of Figure A-7, we have expressed the coordinates of the points in parentheses.

It is helpful for you to think of slope as a "rise" and a "run" over it. This is shown in Figure A-8. The amount of rise is divided by the amount of run.

The amount of rise and run are both positive in the example in Figure A-8 on page 21 and in Figure A-7 on the previous page. It's a direct relationship. The inverse relationship is shown in Figure A-9. The rise and the run have different signs because the curve slopes downward. The slope is negative and we are dealing with an inverse relationship.

A straight line's slope is the same between any two points. The slope is constant at all points on a straight line.

We calculate a direct relationship between these two variables, which leads to an upward-sloping curve. Positive slopes can be found in upward-sloping curves.

The inverse relationship between two variables shows up as a downward-sloping curve--rise over run will be negative because the rise and run have opposite signs, as shown in Figure A-9 above. When we see a negative slope, we know that increases in one variable are associated with decreases in the other. We say that downward-sloping curves have negative slopes.

The graph shows that when output increases, it leads to increases in total profits. Increased output causes decreases in total profits.

The curve relating total profits to output levels is shaped like a mountain.

The curve slopes upward for some values and downward for others. The slope of the line between two points on the curve is different from the slope of the line between two other points. As we move along the curve, each slope will be different.

A curve is touched by a straight line at one point.

The two values of the point of tangency are not enough to calculate the slope of a line.

After reading this appendix, you should know what to look for.

Put vertical and horizontal number lines together.

The slope is calculated as the amount of rise Figure A-9, 22 over the amount of run, where rise is movement in the vertical direction and run is movement in the horizontal direction.

The A-10 curve is rising and falling.

The slope of the curve is zero at a maximum or minimum point.

Log in to MyEconLab, take an appendix test, and get a personalized study plan that tells you which concepts you need to review. MyEconLab will give you further practice, as well as videos, animations, and guided solutions.

If you stud the college bookstore and decide the price of a notebook at your economics exam, you will know how many hours you need to work in the weeks preceding the notebooks to buy.

Proponents of daylight saving time face the problem of scarcity, which they claim saves energy that otherwise would be wasted. Adding an extra wak may be able to explain why the scarcity problem causes people to consider hour of daylight in the evening. In this wak, you will learn that giving up more and more units of other goods daylight is an opportunity cost and that obtaining increasing chapter is a choice you have to make.

There would be less mistakes in the treatment of patients. European medical residents work less than 80 hours per week.

rearranging residents' schedules to allow for shorter shifts or for naps would require the hospitals to hire more residents or other medical personnel to cover the scheduling gaps that would result. The implications for patient care of either scheduling change were unknown.

The proposed alternative use of residents' time--getting some rest--would be very costly for the nation's teaching hospitals. The lengthy blocks of time that medical residents currently devote to treating patients are not plentiful.

They must make choices when they can't get everything they want at the same time.

The things that people want are always more expensive than what can be produced with less time and resources.

It is not a shortage. TV newscasts often show people standing in line to get food and cooking fuel after a storm. The line might be caused by the "scarcity" of these products according to a news commentator. We can't get everything we want at a zero price. Don't confuse the concept of scarcity with the concept of shortages as evidenced by people waiting in line to get a product.

Poverty is not the same as slumming. The poor and rich have similar levels of hardship. The richest person on the planet is facing scarcity. The world's richest person only has a limited amount of time available. More scarcity is not created by low income levels. Less scarcity is not created by high income levels.

Like gravity, scarcity is a fact of life. As physicists did not invent gravity, economists did not invent scarcity. It has existed in the past and will in the future.

Resources are not enough to satisfy every desire. The inputs used in the production of things are called resources.

Delivery of resources into products that can be used in different parts of the country is part of production. You can put ice from an ice tray in your consumption.

The amount of resources an economy has at any one time affects what it can produce.

There are many ways in which factors of production can be classified.

Land is a resource that includes location, water, fish, minerals, and the original fertility of land.

Improvements to natural resources include irrigation buildings, equipment, machines, and ditches.

To become more educated.

Human capital is improved when a worker's skills increase.

Losing large sums of wealth on new ventures is one of the consequences of entrepreneurship. New methods of policy decisions are included.

Without entrepreneurship, most business organizations wouldn't exist.

Goods include air to breathe and the beauty of a sunset.

The quantity must always make decisions regarding their best use of the goods that are scarce. By definition, the desired demanded exceeds the quantity supplied at a quantity of an economic good exceeds the amount that is available at a zero price.

Cars, computers, socks, baseball bats, and corn are just some of the economic goods we use in economics.

Restaurant meal preparation, car polishing, psychological counseling, and teaching are examples.

Needs are not the same as wants. There is no way to know if someone is saying "I need some new clothes" or "I want some." If the person making the statement was dying of exposure in a northern country during the winter, we might conclude that they need some warm clothing.

People mean when they say that they want something that they don't currently have.

Humans have a lot of wants. Imagine if every material you wanted was satisfied. You could have all of the things that you want. As new goods and services come to market, you might continue to think of ways to get them. You wouldn't be able to fulfill all of your wants for compassion, friendship, love, affection, prestige, musical abilities, sports abilities, and the like.

In reality, every individual has competing wants, but can't fulfill them all with limited resources. This is what scarcity is like. Each person has the power to make their own choices. When a choice is made to produce or buy something, something else that is also desired is not produced or purchased. In a world of scarcity, every want that ends up being satisfied causes one or more other wants to remain unfulfilled.

The answers can be found on page 47.

All material exceeds what can be produced with the limited resources desires and all nonmaterial desires, such as love, affection, and time that nature makes available, are included in the situation in which human wants always are unlimited.

We simply consider ___________, to produce economic goods that are every person's wants to be, because the concept of ___________ is difficult to define.

We must make choices because of the natural scarcity. Every choice made means that some opportunity must be sacrificed. Giving up the chance to produce or consume something else is one of the choices.

Consider a realistic example. If you want to study economics for one more hour, you have to give up any of the activities that you already do, such as listening to music, reading a novel, or working out at the gym. If you choose to study economics an additional hour, the most highly valued of these opportunities is forgone.

Only you can determine the highest-valued, next-best alternative that you had to sacrifice in order to study economics one more hour. The value of the next-best alternative can only be determined by you.

The value of the next-best alternative must be sacrificed to get something if a choice was made. One more hour will satisfy a want.

If you hadn't studied one more hour, you would have made a choice.

Cost is always a missed opportunity in economics.

To consider why some universities are worth more than others. The cost of your chosen alternative is what you lose, reshuffling their class schedules to raise which is your next- highest-valued alternative. This is the cost of drinking for students.

France is the Sleeping Giant of the Organization for Economic Cooperation and Development because it has the lowest opportunity cost.

A daily average of 530 minutes is the average for the countries of the Organisation for Economic Co-operation and Development.

The opportunity cost shows the extent of the tradeoff. The value of the next-best alternative is the opportunity cost of studying economics.

Let's look at a hypothetical example of a trade-off between economics and mathematics. For the sake of this argument, we will assume that additional time studying economics or mathematics will lead to a higher grade in the subject to which additional study time is allocated. A graph is one of the best ways to look at the trade-off.

If you spend all 12 hours on economics, you will get an A in the course, because you have a maximum of 12 hours per week to study these two subjects. You will fail mathematics. If you spend all of your time studying mathematics, you will get an A, but you won't do well in economics. The trade-off is one to one. A one-to-one trade-off means that if you want to improve from a C to a B, you have to sacrifice one grade in mathematics.

If you study economics and mathematics at the same time, you should get a grade in economics and a grade in mathematics, assuming a fixed amount of ics and a grade in mathematics. There is a line that shows productive resources of a quality.