Luz Figuereo
Professor Allen Sauberman
March 7, 2012
Paper #1
Chapter 1 Key Points: 1. Economics is the study of choices we make among our many wants and desires given our limited resources. 2. Self-interest is not the same as selfishness. For example, Mother Theresa who spent her life caring for others, her work could be considered done because of her self-interest but who would consider it selfish. 3. Ceteris Paribus which means “holding everything else constant”. Basically when trying to asses the effect of one variable on another, you must keep the relationship between the two variables isolated from other words. 4. Fallacy of composition states that if something holds true to one person it does not necessarily mean it would be true for many individuals in a group. 5. Positive statements are attempts to describe what happens and why it happens, while normative statements are attempts to prescribe what should be done.
I understand what economics is and the basis of how and why economists try and predict the behavior of the consumers. How they observe, and come up with a hypothesis. I also understand the differences between macroeconomics and microeconomics. Lastly, what would be considered macro and what would be considered micro.

Chapter 2 Key Points: 1. Human capital is the productive knowledge and skill people receive from education, on the job training, health and other factors that increase productivity. 2. Opportunity cost is the value of the best forgone alternative that was not chosen. For example time spent writing this paper could have been spent relaxing with my kids or studying for another class’s test. 3. An individual will pursue an activity that has an expected marginal benefit greater than the expected marginal cost, that’s called the rule of rational choice. 4. Most people search for opportunities