includes questions from chp 12341011 chapter 1 economics is best defined as the study of how people businesses governments and societies a choose abundance over scarcity b make choices to cope with scarcity c use their infinite resources d attain wealth billie jean has 120 to spend and wants to buy either a new amplifier for her guitar or a new mp3 player to listen to music while working out both the amplifier and the mp3 player cost 120 so she can only buy one this illustrates the basic concept that a trade can make everyone better off b people face tradeoffs c rational people think at the margin d decisions made at the margin are not particularly important the phenomenon of scarcity stems from the fact that a most economies production methods are not very good b in most economies wealthy people consume disproportionate quantities of goods and services c governments restrict production of too many goods and services d resources are limited