Chapter 1--What Economics is About

Chapter 1--What Economics is About - Chapter 1-What...

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Chapter 1—What Economics is About I. Goods, Bads, and Resources A. A good is anything that gives a person utility of satisfaction. B. A bad is anything that gives a person disutility or dissatisfaction. C. Economists divide resources into four categories: land, labor, capital, and entrepreneurship. 1. Land includes natural resources, such as minerals, forests, water, and unimproved land. 2. Labor refers to the physical and mental talents that people contribute to the production process. 3. Capital consists of produced goods that can be used as inputs for further production, such as machinery, tools, computers, trucks, buildings, and factories. 4. Entrepreneurship refers to the particular talent that some people have for organizing the resources of land, labor, and capital to produce goods, seek new business opportunities, and develop new ways of doing things. II. Scarcity A. Scarcity is the condition in which our wants are greater than the limited resources available to satisfy them. B. Scarcity implies choice. In a world of limited resources, we must choose which wants will be
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This note was uploaded on 04/16/2008 for the course ECO 1307 taught by Professor Rice during the Fall '07 term at SMU.

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Chapter 1--What Economics is About - Chapter 1-What...

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