ECON202 - Chapter 1

ECON202 - Chapter 1 - ECON202 Book Notes Chapter 1 1)...

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ECON202 Book Notes Chapter 1 1) Chapter 1 – What is Economics a) Economics, Scarcity and Choice i) Economics – the study of choice under conditions of scarcity (1) Based on aggregation of individual decisions (2) Economists study the consequences of these decisions ii) Scarcity – finite resources under infinite demand (1) Individual scarcity (a) Time (b) Spending power (2) Less scarcity yields more goods and services we want (3) Not enough resources to produce all goods and services desired (scarcity) (4) Allocation – attempt to deal with scarcity iii) Resources (1) Labor (a) Human goods and services (2) Capitol (a) Physical capital (i) Machinery/equipment (ii) Factories (iii)hammers (iv) tools (b) Human Capital (i) Knowledge of worker (ii) Skills of worker (iii)Capital (c) Capital stock Page 1 of 4
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ECON202 Book Notes Chapter 1 (i) Total amount of capital at nations disposal at any point in time (ii) Consists of all physical and human capital that is still useful (3) Land (a) Physical space
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ECON202 - Chapter 1 - ECON202 Book Notes Chapter 1 1)...

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