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chapter1&2 - Chapter 1 2 Economics Social...

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Chapter 1 & 2 Economics: Social Science (Study Human Behaviors) Economics : Study of how economics choose allocate scarce resources between competing ends. Scarcity Choices Opportunity Cost “Economic” Opportunity Cost – Highest evaluated alternative for everyone Micro – One individual firm Macro – All individual firms Positive Analysis – What is? (No values) Normative Analysis – What should be? (Adds values) Economics: The Core Issues Three Core Choices: WHAT to produce with resources HOW to produce goods and services FOR WHOM The Economy is aggregation (mass of groups) of individual production and consumption decisions. Core Problem: Scarcity : Lack of resources Factors of Production: Land, Labor, Capital, Entrepreneurship 1. Land: Natural resources (oil, water, etc..) 2. Labor: Human Resources 3. Capital: Final goods produced in production of other goods and services (Factories, fleet vehicles, etc…) 4. Entrepreneurship: Assembling resources to produce new or improved products and technology.
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