No Free Lunch: Economics for a Fallen World: Third Edition, Revised

Chapter Two: Fundamentals of Economic Behavior 37 DESIRED LEARNING OBJECTIVES At the conclusion of this chapter, the student should be able to... § § Relate how gains from trade in markets, and how social cooperation in markets leads to benefits similar to the social cooperation of the body of Christ § § Explain the concept of scarcity: why scarcity requires rationing, and why rationing means choice and the payment of an opportunity cost § § Define the terms scarcity , rationing , and opportunity cost in everyday language § § Outline the “margin” and how this applies to our everyday choices § § Summarize the importance of institutions, and provide examples of important economic institutions § § Appreciate how Emergent Order results from the combination of individual plans § § Define the Division of Labor and Gains from Specialization, and why they lead to economic growth § § Explain the difference between absolute and comparative advantage § § Define what utility means (from an economic perspective) § § Differentiate between cardinal and ordinal measures § § Demonstrate the Law of Diminishing Marginal Utility