Chapter1

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Chapter1

  1. 1. Economics Chapter One Notes What is Economics?
  2. 2. Abbreviations: <ul><li>∆ </li></ul><ul><li>bldg., svcs., nat. </li></ul><ul><li>e.g. </li></ul><ul><li>i.e. </li></ul><ul><li>b/c </li></ul><ul><li>w/ </li></ul><ul><li>w/o </li></ul><ul><li>* think about text messaging-- </li></ul>
  3. 3. What Is Economics? <ul><li>ECONOMICS: The study of people producing & exchanging things of value to get Goods & Services </li></ul><ul><li>MARKET: A place where voluntary exchanges of goods & services take place </li></ul><ul><li>MARKET ECONOMY: An economic environment where goods & services are exchanged voluntarily </li></ul><ul><ul><ul><li>SCARCITY: The result of the inability to satisfy everyone’s wants. </li></ul></ul></ul><ul><ul><ul><li>ALL RESOURCES ARE SCARCE (i.e., TIME, $$, TREES, CARS, ETC.) </li></ul></ul></ul>
  4. 4. RESOURCES: basic elements used to produce goods and svcs.  There are 4 basic types: <ul><li>NATURAL RESOURCES: Unaltered gifts of nature (trees, minerals, water, etc.) </li></ul><ul><li>HUMAN RESOURCES: Labor; physical and mental efforts exerted by people to create goods & svcs. </li></ul><ul><li>CAPITAL RESOURCES: Bldgs., tools, machines people use to create goods & svcs. (also known as overhead) </li></ul><ul><li>ENTREPRENEURSHIP: Imaginative thinking, willingness to take risks, mgmt. & org. skills needed to operate an innovative business. </li></ul>
  5. 5. BASIC PRINCIPLES OF ECON. <ul><li>OPPORTUNITY COST: ALWAYS the best alternative you give up when making a choice. </li></ul><ul><ul><li>Giving up basketball shoes to buy a TV- </li></ul></ul><ul><ul><ul><li>Opp. Cost = Shoes </li></ul></ul></ul><ul><li>TRADE-OFFS: b/c resources scarce, must choose some things over others. This is a: </li></ul><ul><ul><li>TRADE-OFF — the process of determining your opportunity cost (e.g., shoes for TV) </li></ul></ul>
  6. 6. Basic Principles, (cont’d.) <ul><li>MACROECONOMICS: The “Big Picture:” </li></ul><ul><ul><li>Issues such as unemployment, poverty, budgets, etc. </li></ul></ul><ul><li>MICROECONOMICS: “ Individual Issues:” </li></ul><ul><ul><li>Personal finance, indiv. consumerism, etc. </li></ul></ul><ul><ul><li>How macro issues like unemployment, productivity affect people. </li></ul></ul>
  7. 7. What Resources Are Present?
  8. 8. What Resources Are Present?
  9. 9. What Resources Are Present?

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