Learning Objectives

After reading this chapter, you should be able to

1.1 Define and describe what is meant by the term economics.

1.2 Describe what economists mean when they say that people engage in rational behavior and respond to incentives in predictable ways.

1.3 Define and explain economic theories and models.

1.4 Describe the difference between correlation and causation.

1.5 Define and explain the distinction between positive statements and normative statements.