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