Economic goals, problems and concepts

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Economic goals, problems and concepts

  1. 1. BB 32 UNIT 1 ECONOMIC PROBLEMS& GOALS, CONCEPT OF SCARCITY & CHOICE BB 32 MICRO ECONOMICS
  2. 2. PROF. NAMRATA MEHTA - LNCMT, SURAT. 2
  3. 3. NEED WANT DESIRE PROF. NAMRATA MEHTA - LNCMT, SURAT. 3
  4. 4. WANT DESIRE MONEY POWER DEMAND PROF. NAMRATA MEHTA - LNCMT, SURAT. 4
  5. 5. Scarcity “Limited quantities of resources to meet unlimited wants.” Your wants are pretty much unlimited. All resources, goods, and services are limited,All resources, goods, and services are limited, however. This means it’s impossible for all the wants to be met. PROF. NAMRATA MEHTA - LNCMT, SURAT. 5
  6. 6. Opportunity cost PROF. NAMRATA MEHTA - LNCMT, SURAT. 6
  7. 7. Scarcity and choice Scarcity and choice and opportunity cost Scarcity and choice for firm Scarcity and choice for societyScarcity and choice for society PROF. NAMRATA MEHTA - LNCMT, SURAT. 7
  8. 8. Economic problems Economics, then, tries to solve the problem of scarcity. How to determine and what to produce Socialism - societySocialism - society Communism – centrally Capitalist- laissez faire PROF. NAMRATA MEHTA - LNCMT, SURAT. 8
  9. 9. PROF. NAMRATA MEHTA - LNCMT, SURAT. 9
  10. 10. Land, Labor, Capital and enterpriseLand, Labor, Capital and enterprise These have specific meanings in economics. PROF. NAMRATA MEHTA - LNCMT, SURAT. 10
  11. 11. Land All natural resources used to produce goods and services. PROF. NAMRATA MEHTA - LNCMT, SURAT. 11
  12. 12. Labor Work people get paid for. PROF. NAMRATA MEHTA - LNCMT, SURAT. 12
  13. 13. Capital Human-made resources used to produce stuff or provide services. This includes things like buildings, factories, equipment, computers, paper, copy machines, etc.equipment, computers, paper, copy machines, etc. PROF. NAMRATA MEHTA - LNCMT, SURAT. 13
  14. 14. Enterprise Makes sure all the 3 factors of production are co- operating and organsied PROF. NAMRATA MEHTA - LNCMT, SURAT. 14
  15. 15. Economic goals Full employment of factors of production Price stability Inflation Economic growthEconomic growth Free trade with nations “correct ” distribution of income PROF. NAMRATA MEHTA - LNCMT, SURAT. 15
  16. 16. Efficiency- production efficiency PROF. NAMRATA MEHTA - LNCMT, SURAT. 16
  17. 17. Specialization Three coordination tasks with markets and prices How to produceHow to produce What to produce For whom to produce PROF. NAMRATA MEHTA - LNCMT, SURAT. 17
  18. 18. PROF. NAMRATA MEHTA - LNCMT, SURAT. 18

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