GOVERNMENT
Notes 3rd quarter.docx

Notes 3rd quarter.docx - Unit 1 Positive vs Normative...

Info icon This preview shows pages 1–4. Sign up to view the full content.

Unit 1 1/9/2018 Positive vs Normative Positive Statements - Based on fact. Avoids value judgement (what it). Normative Statements - Includes value judgements (what ought to be). # Times Watching Movie Benefit Cost 1st $30 $10 2nd $15 $10 3rd $5 $10 Total $50 $30 You will continue to do something until the marginal cost outweighs the marginal benefit. 1/10/2018 5 Key Economic Assumption 1. Society’s wants are unlimited, but ALL reasons are limited ( scarcity ). 2. Due to scarcity, choices must be made. Every choice has a cost (a trade-off ). 3. Everyone’s goal is to make choices that maximize their satisfaction. Everyone acts on their own “self-interest”. 4. Everyone acts nationally by comparing the marginal costs and marginal benefits of every choice. 5. Real-life situations can be explained and analyzed through simplified models and graphs. 1/11/2018 Trade-offs and Opportunity cost ALL decisions involve trade-offs. Trade-offs are all the alternatives that we give up whenever we choose one course of action over others. (Examples: going to the movies)
Image of page 1

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

The most desirable alternative given up as a result of a decision is known as opportunity cost. What are trade-offs of deciding to go to college? What i the opportunity cost going to college? GEICO assumes you understand opportunity cost. Why? 1/12/2018 What is everything made of? Four Factors of production The Four Factors of Production Production goods and services requires the use resources. ALL resources can be classified as one of the following four factor of production. Land= All natural resources that are used to produce goods and services. Anything that comes from “mother nature”. (Water, sun, plants, oil, trees, stone, animals, etc). Labor= Any effort a person devotes to a task for which that person is paid. (manual laborers, lawyers, doctors, teachers, waiters, etc). Two types of capital 1. Physical capital- Any human-made resources that is used to create other goods and services (tools, tractors, machinery, buildings, factories, etc.) 2. Human capita- Any skills or knowledge gained by a worker through education and experience ( college degrees, vocational training, etc.) Entrepreneurship= ambitious leaders that combine the other factors of production to create goods and services. Examples- Henry Ford, Bill Gates, Inventors, Store Owners, etc. Entrepreneurs: 1. Take The Initiative 2. Innovate 3. Act as the Risk Bearers So they can obtain PROFIT . Profit= Revenue - Costs
Image of page 2
1/8/2018 What is the Production Possibilities Curve? A production possibilities graph (PPG) is a model that shows alternative ways that an economy can use its scarce resources. This model graphically demonstrates scarcity, trade-offs, opportunity costs, and efficiency. 4 Key Assumptions Only two goods can be produced. Full employment of resources Fixed resources (Ceteris Paribus) Fixed Technology 1/19/2018 The Circular Flow Model Marker Any arrangement that brings buyers and sellers together.
Image of page 3

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

Image of page 4
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern