CHAPTER 1 : INTRODUCING THE ECONOMIC WAY OF THINKING (Summary (Ceteris…
CHAPTER 1 : INTRODUCING THE ECONOMIC WAY OF THINKING
Another reasoning pitfall is to think
If this assumption is violated, a model cannot be tested.
"All other factors unchanged" that might affect a particular relationship.
Microeconomics examines individual decision - making units within an economy. Microeconomics studies such topics as a consumer's response to changes in the price of coffee and the reasons for changes in the market price of personal computers
Macroeconomics applies an economy wide perspective that focuses on such issues as inflation, unemployment, and the growth rate of the economy
Individuals and society therefore can never have everything ther desire.
The faundamental economic prob. that wants exceed the availability to times, goods, and resources
An entrepreneur combines resources to produce innovative products
Entrepreneurship is a special type of labor.
Factors of production classified as land, labor, and capital.
The study of how individuals and society choose to allocate scarce resource.
Faced with unlimited wants and scarce resources, we must make choices among alternative.
In order to satisfy unlimited wants.
What is Ceteris Paribus?
A Latin phrase that means that while certain variables can change, "all other things remains unchanged"
What is Economics?
What is Macroeconomics?
What is Microeconomics?
The branch of economics that studies decision - making by a single individual, household, firm, industry, or level of government.
The branch of economics that studies decision - making for the economy as a whole.
The study of how society chooses to allocate its scarce resources to the production of goods and services in order to satisfy unlimited wants.
What is Entrepreneurship?
The creative ability of individuals to seek profits by combining resources to produce innovation products-
Land, labor and capital.
what is scarcity?
Scarcity force us to do?
It forces us to makes choices
greater than available supply
time, goods and resources
the condition in which forever greater
providing people's wants and need in a world of scarcity
Three categories of resources?
What are resources
The basic categories of inputs used to produce goods and service.
The money used to purchase capital
The pyhsical plants machinery, and equipment used to produce oher goods.
The mental and physical capacity of workers to produce goods and service.
A shorthand expresion for any natural resources provided by nature.