NOTE_Lecture_1__-_intro_to_economics

NOTE_Lecture_1__-_intro_to_economics - Intro to economics...

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1 Intro to economics Objectives What is “economics”? Three basic economic questions Circular flow model Microeconomics vs. macroeconomics Economic theory vs. reality Opportunity cost & the production possibility frontier (PPF) Law of increasing opportunity costs What is economics all about? Social science = study of human behavior Basis of economics = scarcity
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2 Definition of economics Economics is the study of how people and societies choose to allocate scarce resources to satisfy unlimited human wants Resources are limited while human wants are unlimited…therefore, we have SCARCITY! We (people & societies) must therefore make CHOICES Four economic resources Land Labor Capital Entrepreneurial ability Land Land (a broader meaning than our normal understanding of the word) Includes natural resources such as timber, oil, coal, iron ore, soil, water, as well as the ground in which these resources are found; that is, land includes the ground, and the natural resources on and in that ground Owners of land receive “rent” as payment for use of the land
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3 Labor Labor refers to not only the number of workers (or hours worked), but also the quality or skills of the labor. Also referred to as “human capital”
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This note was uploaded on 05/22/2011 for the course ECON 1B taught by Professor Jamie during the Spring '06 term at West Valley.

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NOTE_Lecture_1__-_intro_to_economics - Intro to economics...

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