Summary introduction microeconomics chapter1

Because of scarcity, every choice involves a trade-off — you have to give up something to get something else The true cost of any choice is the opportunity cost — the cost of the best alternative given up Opportunity cost is more important than money cost For a smart choice, the value of what you get must be greater than value of what you give up Economic models assume all other things not in the model do not change Mental equivalent of controlled experiments in laboratory Positive statementsabout what is; can be evaluated as true or false by checking the facts Normative statementsabout what you believe should be; involve value judgments Cannot be factually checked Because you can never satisfy all of your wants, making the most out of your life requires smart choices about what to go after, and what to give up.