Econ Lecture 2

Econ Lecture 2 - Announcements 1.Read announcements on...

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Announcements 1.Read announcements on Blackboard! 2.First HW on Aplia is due Monday at midnight. 3.Again, you DO NOT need a physical book since Aplia includes and e-book. 4.Can use other people’s iClicker (as long as they are not in this class!) 1 of 36
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iClicker Q: My name rhymes with: A.cost B.host C.rutabaga 2 of 36
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A Puzzle Ice cream stores like to have occasional “free ice-cream” days. They’ve noticed that more people show up for free ice-cream in poor neighborhoods than in rich neighborhoods. Does this mean that rich people like ice- cream less?
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Choices and Scarcity As we said last time, economics is all about agents making decisions about what to do with scare resources. What are these resources and what can we do with them? Who are the main players in this game? How do they decide things?
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Resources Inputs; factors of production Used to produce goods and services Goods and services are scarce because resources are scarce 1. Labor 2. Capital 3. Natural resources (land) 4. Entrepreneurial ability
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Resources Labor - human effort Physical effort Mental effort Time Payment: Wage Capital - human creations Physical capital Human capital Payment: Interest
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Resources Natural resources - Gifts of nature Renewable Exhaustible Payment: Rent Entrepreneurial ability Talent, idea Risk of operation Payment: Profit
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Goods and Services Good: see, feel, touch Service: intangible Scarce good/service Almost all goods and services are scarce: The amount that people desire exceeds the amount available at a zero price. Choice We give up some goods and services to get others (opportunity cost). Everything has a cost! (even if it’s “free”). “There are no free lunches”
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Econ Lecture 2 - Announcements 1.Read announcements on...

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