ec-18 - Economics Study Guide Chapter 1-3 Scarcity- Our...

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Economics Study Guide Chapter 1-3 Scarcity - Our inability to satisfy all of our unlimited wants Economics - the social science that studies the choices that individual, businesses, governments, and entire societies make as they cope with scarcity and the incentives that influence and reconcile those choices. Tradeoffs- an exchange, giving up one thing to get something else Microeconomics - the study of the choices that individual and businesses make, the way these choices interact with markets, and the influence of governments. Ex.) Dvd Sales vs. Movie Tickets, tax on e-commerce effecting eBay Macroeconomics - the study of the performance of the national economy and the global economy. Ex.) Incomes in the U.S., National Interest Rates Major Questions: 1. How do choices end up determining what, how and for whom goods and services are produced? 2. When do choices make in the pursuit of self-interest also promote the social interest? 1. Land- natural resources (earns rent) 2. Labor- the work time and work effort that people devote to producing goods and services (earns wages) 3. Capital- the tools, machines, and buildings that businesses use to produce goods and services (earns interest) 4. Entrepreneurship- the human resource that organizes labor, land, and capital (earns profit) Private(Self) Interest - choices that you think are best for you
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This note was uploaded on 04/19/2011 for the course ECON 200 taught by Professor Staff during the Winter '09 term at Indiana.

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ec-18 - Economics Study Guide Chapter 1-3 Scarcity- Our...

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