p.4 Economics can be defined as the social science concerned with the problem of using or administering
scarce resources (the means of producing) so as to attain the greatest or maximum fulfillment of society's
unlimited wants (the goal of producing).
p.4 [John Maynard Keynes quoted] It [economics] is a method rather than a doctrine, an apparatus
of the mind, a technique of thinking which helps its possessor to draw correct conclusions.
p.6 Every economic system must provide some method of choosing among the different available technologies
of production.
p.14 The prospect of progress is also an incentive for people to put forth the extra effort to make it a
reality.
p.19-20 The discipline of economics consists of a large number of theories. A reasonable, if not precise,
definition of an economist is one who knows the major economic theories and is engaged in testing and modifying some of them...
Economic theories are often called models. A model is a formal statement of a theory - a simplified view of how some part
of the economy is assumed to operate... The study of economics is a search for relationships that occur between different
economic variables. A variable is a quantity that can assume any of a set of values... The most important
requirement of a theory is that it be useful. Most economists... want to learn how to solve economic problems, and
the answers lie in the use of present theories or of theories not yet devised.
p.20 Economics is a social science. In general, the social sciences are less exact than the natural
or physical sciences. For this reason the social scientist must often be satisfied with predicting the direction
of change instead of the amount.
p.21 A theory need not fit all the facts... Reality is often too complex to be grasped all at once. Sometimes
we must simplify and isolate facts in order to see and understand relationships between particular variables.
This is the role of assumptions - to set forth the limits of the variables in a theory and to state which of the variables
are to be omitted.
p.30 Equilibrium is a state of balance. In a state of equilibrium, forces for change within a system offset
each other so that there is no net tendency for the system to change.
p.32 In economics, investment refers to the creation of capital. Business people invest when they purchase
goods that enable them to produce yet other goods.
p.32 Yet another difficulty often faced in economics is the matter of time lags - the amount
of time it takes for a change in an economic variable to have an effect.
p.36,37 A major theme running through this chapter is that the existence of scarcity necessitates
choice... Also because of scarcity we must consider opportunity cost, the idea that the real cost of something is
what is given up to obtain it... Scarcity means that the amount of something actually available is not sufficient to meet
some requirement.
p.57 Substitutes are goods that may be used instead of one another.
p.164 What good is all this analysis? Can it tell us anything about what caused the Great Crash
of 1929 or about the possibility of it happening again? [JLJ - apparently not]
p.212 we can now define money as anything that is generally accepted in an
economy as a medium of exchange, a unit of account, and a store of purchasing power.
p.408 Utility is a measure or expression of an individual consumer's expected, or anticipated, satisfaction.
As we have seen, this may be either more or less than this person's actual satisfaction. Utility theory assumes that total
and marginal utility are measurable.
