Gen econch1notes

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Gen econch1notes

  1. 1. Introduction to Economics <ul><li>Chapter One </li></ul>
  2. 2. Three basic questions <ul><li>1. What to produce? </li></ul><ul><li>Ex: food? weapons? electronics ? </li></ul>
  3. 3. <ul><li>2. How to produce it? </li></ul><ul><li>Ex: by hand? with machines? factory system? division of labor </li></ul>
  4. 4. <ul><li>3. For whom to produce? </li></ul><ul><li>Ex: Who gets the products? Everyone equally? Those who can afford it? </li></ul>
  5. 5. Key Terms <ul><li>Need: something essential for survival. Ex: water, shelter, food </li></ul>
  6. 6. <ul><li>want: something that people desire but do not need for survival. Ex: cheeseburger, sportscar </li></ul>
  7. 7. <ul><li>goods: physical objects that someone produces. Ex: shoes, cars, houses </li></ul>
  8. 8. <ul><li>services: the actions or activities that one person performs for another Ex: haircut, lawn mowing </li></ul>
  9. 9. <ul><li>scarcity: the principle that limited amounts of goods and services are available to meet unlimited wants. Scarcity is all around, all the time. </li></ul>
  10. 10. <ul><li>economics: the study of how people seek to satisfy their needs and wants by making choices </li></ul>
  11. 11. <ul><li>shortage: a situation in which consumers want more of a good or service than producers are willing and able to make available at a particular price. Shortages are temporary. </li></ul>
  12. 12. <ul><li>entrepreneur: a person who decides how to combine resources to create goods and services. Ex: restaurant owner, flower shop owner... </li></ul>
  13. 13. <ul><li>factors of production: the resources that are used to make goods and services </li></ul>
  14. 14. <ul><li>land: all natural resources that are used to make goods and services. Ex: trees, petroleum, corn, wheat... </li></ul>
  15. 15. <ul><li>labor: the effort people devote to tasks for which they are paid. Ex: teachers, doctors, mechanics... </li></ul>
  16. 16. <ul><li>capital: any human made resource that is used to produce other goods and services. Ex: cash register, computer, phone... </li></ul>
  17. 17. <ul><li>physical capital: the human made objects used to create other goods and services. Ex: See above </li></ul>
  18. 18. <ul><li>human capital: the knowledge and skills a worker gains through education and experience. Ex: medical degree, mechanic’s certification, cooking school... </li></ul>

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