Copyright 2006, Glen R. Waddell. Econ 201 - Principles of Microeconomics1You should have…1.Read syllabus.2.Thought about switching your major/minor to Economics.Class web page: www.uoregon.edu/~waddell/201.htmFinal Exam: 12 June, 8amIntroduction and MotivationOur discussion:1.Three questions for every economy 2.Prices and markets3.Theory4.An example5.Scarcity and competition6.Cost7.Demand and Supply1.What should we (our economy) produce?2.How should we produce?3.For whom should we produce?1. Three Questions…Socialism: an economic system based on individuals’ good will toward others, not their own self-interest–in principle, society decides what, how and for whom to produceFeudalism: an economic system in which traditions rule.–If your parents were serfs, you were a serf.–Feudalism dominated the western world from about the 8thto the 15thcentury.The Organization of an EconomyMercantilism: an economic system in which government determines the what, how and for whom decisions by doling out the rights to undertake certain economic decisions.–Mercantilism remained the dominant economic system until the 1700s (the industrial revolution).Capitalism: an economic system based on private property and the market in which, in principle, individuals decide how, what and for whom to produce.–Under capitalism individuals are encouraged to follow their own self-interest while market forces of supply and demand are relied upon to coordinate those individual pursuits.–Distribution of goods is to each individual according to his or her ability, effort, and inherited property.
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