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CHAPTER 2 UNDERSTANDING BASIC ECONOMICS (Factors of Production (Natural…
CHAPTER 2
UNDERSTANDING BASIC ECONOMICS
Economy
The sum total of all the economic activity within a given region
Microeconomics
The study of how consumers, businesses and industries collectively determine the quantity of goods and services demanded and supplied at different prices
Factors of Production
Natural resources
Human resources
Capital
Entrepreneurship
Knowledge
Type of Unemployment
Frictional Unemployment
the "natural" flow of workers into and out of jobs
Structural Unemployment
a mismatch between workers' skills and current employer needs
Cyclical Unemployment
caused by economic fluctuations
Seasonal Unemployment
predictable increases and decreases in the need for workers in industries with seasonal fluctuations in customer demand
Categories of Competition
Pure competition
many small supplier
Monopolistic competition
can have few or many supplier, of varying size
Oligopoly
small number of supplier, even as few as just two
Pure monopoly
only one supplier in a given market
Regulated monopoly
only one supplier in a gven market
Major Types of Taxes
Income taxes
Real property taxes
Sales taxes
Payroll taxes
Excise taxes
Economics
The study of how a society uses its scarce resources to produces and distribute goods and services
Macroeconomics
The study of "big picture" issues in an economy, including competitive behavior among firms, the effect of government policies and overall resources allocation issues