Chapter1

Chapter1 - 8/21/2007 ECONOMICS 101 LECTURE 1&2 /...

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8/21/2007 E CONOMICS 101 L ECTURE HAPTER 1 I) Economics = Scarcity + Insatiability definition: the study of how people, individually and collectively, allocate their limited resources to try to satisfy their unlimited wants Scarcity - occurs because human wants exceed the production possible with our limited time and resources - unlimited wants vs. limited resources - forces us to choose Insatiability - self-interest - ex: story of choosing between saving millions of lives and cutting off finger - rationality - forward-thinking - time consistency Goods - any item or service that adds to human happiness - commodities: tangible goods that can be bought and sold (i) ex: cars, books, VCRS - services: intangible goods (i) ex: haircuts, police protection, car wash - free goods: anything of value that is not scarce (i) ex: air, sunlight Economic Bad
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8/21/2007 - anything that reduces happiness - ex: garbage Value in use - what you get out from using the item Value in exchange - the value you get out of an item from trading it - the motivating factor for firms to produce goods I I) Production using technology to apply energy to materials in ways that make the materials more valuable, or that otherwise
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This note was uploaded on 03/19/2008 for the course ECON 101 taught by Professor Balaban during the Fall '07 term at UNC.

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Chapter1 - 8/21/2007 ECONOMICS 101 LECTURE 1&2 /...

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