03___Ch_02___Econ_101 - Econ 101 Introduction to...

Info iconThis preview shows pages 1–7. Sign up to view the full content.

View Full Document Right Arrow Icon
  Econ 101 Introduction to Microeconomics Professor Richard V. Burkhauser 2 2 Thinking Like an Economist
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Econ 101 – Professor Burkhauser Key Concepts circular-flow diagram, p. 22 production possibilities frontier, p. 24 microeconomics, p. 27 macroeconomics, p. 27 positive statements, p. 28 normative statements, p. 28
Background image of page 2
Figure 2.1 The Circular Flow Spending Goods and services bought Revenue Goods sold Labor, land, and capital Income = Flow of inputs and outputs = Flow of dollars Factors of production Wages, rent, and profit FIRMS •Produce and sell goods and services •Hire and use factors of production •Buy and consume goods and services •Own and sell factors of production HOUSEHOLDS •Households sell •Firms buy MARKETS FOR FACTORS OF PRODUCTION •Firms sell •Households buy MARKETS FOR GOODS AND SERVICES
Background image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Econ 101 – Professor Burkhauser Question 2.1: Scarcity It is said that the U.S. is an “economy of scarcity”. This statement: a) is false, because the U.S. is one of the richest countries the world has ever known b) is false, because the resources that are scarce in the U.S. can always be imported from abroad c) is true, because our resources are not sufficient to realize all of our goals d) is true, but only temporarily – in the future, we will probably have adequate resources to achieve all our goals
Background image of page 4
Table 2.1 Production Possibilities 0 5 F 7 4 E 12 3 D 7 5 3 2 15 2 C 17 1 B 18 0 A 1 -- Opportunity Cost (Wheat/ Cars) Wheat Cars
Background image of page 5

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Figure 2.2 Production Possibilities Frontier 2 4 6 8 10 12 14 16 18 20 0 1 2 3 4 5 6 A B C D E F Inefficient point Infeasible point
Background image of page 6
Image of page 7
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 13

03___Ch_02___Econ_101 - Econ 101 Introduction to...

This preview shows document pages 1 - 7. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online