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Economics is the study of how people choose to use scarce resources for the production of alternative goods and services and how these are distributed among people. 1. Land - Natural resources \ 2. Labor - Human capital* (Most important) \ How much you have \ what kind you have Resource base the value of capital 3. Capital – “real” NOT financial / Man-made producer goods: computers, cars, tools / Not a resource; allows you to claim a resource (capital) / Scarce = the want for something exceeds the availability of the item
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Unformatted text preview: PRODUCTION “Efficiency” WORLD OF SCARCITY The Economic Problem (Universal) What? How? Can be satisfied in a variety of ways. Ex-many types of cars For Whom? The Economic System: The way people organize themselves to cope with an economic problem Pure N. Korea Russia US Hong Kong Pure Command Cuba China Singapore Market *Govt involvement *No govt; voluntary exchange All economic systems are a blend between the two markets. RES. GOODS & SERVICES “ECON PIE” WANTS...
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