Chapter 1

Chapter 1 - Macroeconomics Notes Chapter 1 Good = anything...

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Unformatted text preview: Macroeconomics Notes Chapter 1 Good = anything that gives a person utility or satisfaction- Can be tangible or intangible Bad = something that gives a person disutility or dissatisfaction Resources - Divided into four broad categories: o Land (aka Natural resources): inc. minerals, forests H 2 O and land o Labor : physical and mental talents of people used towards producing goods o Capital : produced goods used as inputs for further production. i.e. factories, machinery, computers and buildings o Entrepreneurship : Particular talents that people have for organizing the resources of land, labor and capital to produce goods. Scarcity the condition in which what we want exceeds the resources available to produce those wants.- Without scarcity, economics would not exist- Effects of Scarcity: o The need to make choices some wants must go unsatisfied o The need for a rationing device (a means of deciding who gets what). i.e. dollar price All rationing devices discriminate against someone Money gives producers incentive to produce, other rationing devices would not o Competition (exists because of scarcity) Whatever the rationing device, people will compete for it Economics The science of scarcity; the science of how individuals and societies deal with the fact that wants are greater than the lim ited resources available to satisfy those wants. Self Test p 5. 1. Scarcity is the condition of finite resources. True or False? Explain....
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This note was uploaded on 04/16/2008 for the course EB 011 taught by Professor Noell during the Spring '08 term at Westmont.

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Chapter 1 - Macroeconomics Notes Chapter 1 Good = anything...

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