L1 - EC 1 UCLA Dr. Bresnock Lecture 1 What is Economics?...

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EC 1 UCLA Dr. Bresnock Lecture 1 What is Economics ? Here are several definitions. It is a social science concerned with the efficient use of limited, or scarce, resources to achieve maximum satisfaction of human material wants. (typical texts) It is the study of how people and society end up choosing, with or without the use of money, to employ scarce productive resources that could have alternative uses, to produce various commodities and distribute them for consumption, now or in the future among various persons and groups in society. (Samuelson) An analysis of choice making. (Bresnock) 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 Transitional Economies – Eastern Europe Pure Market Pure Command (Capitalism) (Communism) U.S., Canada, Japan, EU China Cuba, N. Korea Pure Market – private property rights and decentralized decision making coordinated through markets. Pure Command – state ownership and control of economic resources and central planning.
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EC 1 Lecture 1 Dr. Bresnock 2 Resources – also known as inputs. An input is also referred to as a “factor of production” if it earns income over and over again, i.e. labor and capital equipment are used repeatedly in production whereas other inputs, i.e. electricity, cloth, are used only once. 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”
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L1 - EC 1 UCLA Dr. Bresnock Lecture 1 What is Economics?...

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