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251Ch1lecture2Notes

251Ch1lecture2Notes - Ch1 What is Economics Lecture 2...

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8/21/2011 1 Chapter 1: What is Economics? Lecture 2: Scarcity, Resources, and Incentives Scarcity Scarcity = available resources are insufficient to satisfy wants • What’s not scarce? Ch1: What is Economics Lecture 2: Scarcity, Resources, and Incentives 2 3 Economic Resources 1. Land (natural resources) 2. Labor 3. Capital 4. Entrepreneurship
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Unformatted text preview: Ch1: What is Economics Lecture 2: Scarcity, Resources, and Incentives 4 Incentives • Incentives: – Rewards or penalties that encourage or discourage an action – If benefits > costs Do it! – If benefits < costs Don’t do it! Ch1: What is Economics Lecture 2: Scarcity, Resources, and Incentives...
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