2010 post-1

2010 post-1 - Introduction, Opportunity Costs and...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
Introduction, Opportunity Costs and Comparative Advantage I. Economics is the study of choices 3 made in the face of scarce 2 resources 1 . (Also: the study of how people respond to incentives) 1. Resources (also known as factors of production): a. Land – any natural endowments (includes land, flora, fauna, minerals, water, etc.) b. Labor – physical human resources c. Physical Capital – manufactured aids to production (tools, machinery, buildings, etc.) d. Human Capital – mental human resources (also manufactured through training, learning-by-doing, education, etc.) 2. Scarcity: in relation to human wants (needs) existing resources are inadequate. 3. Choice: something must be given up or done without. This means there are costs associated with every choice. II. Opportunity Costs – the cost of obtaining anything (material or other items) is the value of what must be given up to obtain that item. Example 1:
Background image of page 1

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

View Full DocumentRight Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 03/31/2008 for the course ECON 2010 taught by Professor Mertens,wi during the Spring '07 term at Colorado.

Page1 / 6

2010 post-1 - Introduction, Opportunity Costs and...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online