ECO 1413 Chapter 1: Principles of Economics
Definition of Economics
Types of Goods
Opportunity costs/Tradeoffs
5 basic questions
Factors of production
Concerned with the efficient use of limited or scarce resources to achieve maximum satisfaction of human materials wants.
Human wants are unlimited, but the means to satisfy the wants are limited.
economics is the study of the use of scarce resource to satisfy unlimited human wants.
Microeconomics - Study the behavior and interactions among the various individuals and organizations within an economic system
Economic goods
Free goods
Economic Bads
Since there are not enough available resources to satisfy the wants of individuals, so it forces them must made choice among available alternatives.
defined as the cost of not selecting the ‘next best’ item.
Labor
Capital
Land
Entreprenuership
How should those goods and services be produced?
When should the goods or services be produced?
How many units of goods or services should be produced?
How should those goods or services be distributed among the members of society?
What goods and services should be produced?
Decisions require comparing costs and benefits of alternatives. The opportunity cost of an item is what you give up to obtain that item