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Unformatted text preview: Econ 1 UCLA Dr. Narag Lecture 2 Note : This is the second set of abbreviated class notes to accompany our class. Please remember to check the “List of Links” on the class website for notes for each class prior to each upcoming lecture. It will be your responsibility to download and print a copy of the notes and bring them to class. Remember, the postings will be partial lecture notes. You must attend lecture to fill in additional tables, graphs, derivations of theoretical points, and applications. I will not be posting complete notes for the lectures, just the abbreviated notes. The intention is to economize on class lecture time so that we can devote more class time to the more difficult concepts. Fundamental Economic Problem Unlimited Wants vs Limited Resources Demands > Supplies Scarcities Consumer Decision – maximizing satisfaction given their limited income, or budget. Producer Decision – maximizing profit given their limited resources. Government Decision – maximizing net benefits to society given limited budgets. Private Sector = Consumers + Producers + Public Sector = All Levels of Government Mixed Market Economy , i.e. U.S. Types of Economies Pure Market Pure Command (Capitalism) (Communism) U.S., Germany Cuba Pure Market – private property rights and decentralized decision making coordinated through markets. Pure Command – state ownership and control of economic resources and central planning. Econ 1 Lecture 2 Dr. Narag 2 Resources – also known as factors of production, inputs, and productive inputs. I. Human Resources A. Labor – many types. See “occupational triangle” below. Notice that there are more plentiful workers in the unskilled category. Consequently the wage for those workers will be quite low. At the top of the triangle there are far fewer workers in the “G”(short for genius or someone with unique talents), and such persons receive rather high salaries. “M & P” represents managers and other professional persons. Note also that the Human Capital of the workers increases greatly as the workers move higher on the occupational triangle. Human capital is a measure of the workers education, training and skills. B. Entrepreneur – creative genius, the person or persons who put together all of the factors of production and produce a marketable product. II. Non-Human Resources A. Capital – tools, equipment, aka “investment goods”. Not stocks and bonds. B. Land – “Natural Capital”. Environmental and natural resource endowment....
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- Fall '08
- Economics, Dr. Narag