Chapter 1 Lecture - Economics 101H Vandan Desai Chapter 1 Ten Principles of Economics(Lecture Outline The word economy comes from a Greek word for

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Economics 101H Vandan Desai P a g e | 1 Chapter 1: Ten Principles of Economics (Lecture Outline) -------------------------------------------------------------------------------------------------------------------------- . . . The word economy comes from a Greek word for “one who manages a household.” A household and an economy face many decisions o Who will work? o What goods and how many of them should be produced? o What resources should be used in production? o At what price should the goods sold? Society and Scarce Resources: o The management of society’s resources is important because resources are scarce. o Scarcity … means that society has limited resources and therefore cannot produce all the goods and services people wish to have. Economics is the study of how society manages its scarce resources. I. How people make decisions A. Principle #1: People Face Tradeoffs i. “There is no such thing as a free lunch!” ii. To get one thing, we usually have to give up another thing. 1. Guns v. butter 2. Food v. clothing 3. Leisure time v. work 4. Efficiency v. equality a. Efficiency – means society gets the most that it can from its scarce resources. b. Equality – means the benefits of those resources are distributed fairly among the members of society. iii.
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This note was uploaded on 10/31/2010 for the course ECON 202 taught by Professor - during the Fall '08 term at Community College of Baltimore County.

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Chapter 1 Lecture - Economics 101H Vandan Desai Chapter 1 Ten Principles of Economics(Lecture Outline The word economy comes from a Greek word for

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