Econ 109 Notes

Econ 109 Notes - Econ 109 Notes January 10th 2008 LECTURE...

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Econ 109 Notes  10/01/2008 14:31:00 January 10 th , 2008 LECTURE economics: the study of the allocation of scarce resources (factors of  productions)  how to use these resources  every economy in the world has to answer the same questions: what, how, and  for whom. These questions are answered in different ways: by the government or by the  market  factors of production: 2 categories  labor : output of humans  o entrepreneurial skill is a type of labor capital: all of the stuff that the humans work with- property, tools. Not  necessarily money  o land, natural resources  all services use both labor and capitol  command economy  has a central authority(government) that decides what is made, how it is  produced  no pure command economies, North Korea is probably the closest  Market economy  The marketplace decides what is produced based on what sells. the mixture  between capital and labor are determined by the marketplace No pure market economies  US is close  The reason that there are no pure market economies is because there are  some things for which there are no markets that need to be decided by the  government ie; endangered species 
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Opportunity cost  What else you could have done with the same resources; what you give up to  get something  Time is money “there is no such thing as a free lunch”
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This note was uploaded on 06/08/2008 for the course ECON 109 taught by Professor Watson during the Winter '08 term at UCSB.

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Econ 109 Notes - Econ 109 Notes January 10th 2008 LECTURE...

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