PART I   INTRODUCTION TO ECONOMICS 
                                                                       Chapter  
                                                                         1 
            The Scope and Method 
            of Economics 
                                                      Prepared by: 
                                                           Fernando & Yvonn Quijano 
                © 2007 Prentice Hall Business Publishing   Principles of Economics 8e by Case and Fair 
            PART I   INTRODUCTION TO ECONOMICS 
                            The Scope and Method 
     d                                               of Economics                                        1 
     ho
     Metd cs                                                                                      Chapter Outline 
     an   mi                                                                                 Why Study Economics? 
     e                                                                                       To Learn a Way of Thinking 
                                                                                             To Understand Society 
          cono                                                                               To Understand Global Affairs 
     Scop  E                                                                                 To Be an Informed Voter 
                                                                                              
          of                                                                                 The Scope of Economics 
     The                                                                                     Microeconomics and 
     1:                                                                                         Macroeconomics 
                                                                                             The Diverse Fields of Economics 
     R                                                                                        
                                                                                             The Method of Economics 
                                                                                             Theories and Models 
     PTE                                                                                     Economic Policy 
                                                                                              
                                                                                             An Invitation 
     CHA                                                                                      
                                                                                             Appendix:  How to Read 
                                                                                                and Understand Graphs 
                                                                                              
                        © 2007 Prentice Hall Business Publishing   Principles of Economics 8e by Case and Fair               2 of 36 
             THE SCOPE AND METHOD OF ECONOMICS 
      d
     ho                           economics  The study of how 
     Met                          individuals and societies choose to 
     d    cs                      use the scarce resources that 
     ane  mi                      nature and previous generations 
     Scop Econo                   have provided. 
           of
     The   
     1:
     R     
     PTE
             Economics is the study of how individuals and societies choose to use the scarce 
     CHA     resources that nature and previous generations have provided. The key word in this 
             definition is choose. Economics is a behavioral, or social, science. In large measure it is 
             the study of how people make choices. The choices that people make, when added up, 
             translate into societal choices. 
                        © 2007 Prentice Hall Business Publishing   Principles of Economics 8e by Case and Fair               3 of 36 
             WHY STUDY ECONOMICS? 
      d                          There are four main reasons to study 
     ho                          economics: 
     Met                                  •   to learn a way of thinking, 
     d    cs                              •   to understand society, 
     ane  mi                              •   to understand global affairs, and  
     Scop  Econo                          •   to be an informed voter. 
     The  of
       
     1:
     R     
     PTE
     CHA   
                        © 2007 Prentice Hall Business Publishing   Principles of Economics 8e by Case and Fair               4 of 36