Week 1 Notes.docx - August 29, 2019 ECON 201 Five Factors...

August 29, 2019
ECON 201
Five Factors of Production
1. Natural Resources (Land)
2. Labor
3. Capital
a. Human Capital
b. Physical Capital
4. Entrepreneurship
Positive vs. Normative Analysis
- Most modern economics is based on positive analysis
- Positive analysis can be factually verified
- Positive Analysis: answers the questions “what is?” or “what will be?”
- A second type of economics reasoning is normative in nature:
- Normative Analysis
Positive Questions
- if the government, increases the minimum wage how many workers will lose their job?
- How does a college education affect a person’s productivity and earnings?
Vs. Normative Question
- should the government increase the minimum wage?
- Should the government subsidize a college education?