Chapter 1: Thinking Like an Economist

1. Rational Person

1.1. Motivation

2. Economic Surplus

3. Economics

3.1. Microeconomics

3.2. Macroeconomics

3.3. Statements

3.3.1. Positive

3.3.2. Normative

4. Four Important Decision Pitfalls

4.1. Pitfall 1: Measuring Costs and Benefits as Proportions rather than Absolute Money Amounts

4.2. Pitfall 2: Ignoring Opportunity Costs

4.3. Pitfall 3: Failure to Ignore Sunk Costs

4.3.1. Sunk Cost

4.4. Pitfall 4: Failure to Understand the Average-Marginal Distinction

4.4.1. Marginal Cost

4.4.2. Marginal Benefit

4.4.3. Average Cost

4.4.4. Average Benefit

5. Opportunity Cost

6. Principles

6.1. Scarcity Principle

6.1.1. TANSTAAFL

6.2. Cost-Benefit Principle

6.2.1. Benefit

6.2.2. Cost