Introduction to Economics Notes

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Intro To Econ notes
* Lesson 1.00: Basic Economic Concepts
* Macroeconomics- the study of our national and global economy * To determine how to allocate our nation’s scarce resources and use them more efficiently * Lesson 1.02: Economic Basics

* 3 basic economic questions
* What goods will be produced?
* How will resources be used in the production process? * Who will receive the goods?
* Ceteris paribus= all other things being equal
* Command economy- government makes all economic decisions about how the factors of production are used * No incentive to take risks b/c government controls economy * Market economy- forces of supply and demand determine how economic questions will be answered * Individuals own the factors of production and have the freedom to buy and sell resources in return for profit or other incentives * Price acts as a rationer of goods and services and determinant of what will be produced * Traditional economy- an economy in which economic decisions are based on traditions * Factors of production- land, labor, capital, entrepreneurial ability * Resources- land, labor, capital, entrepreneurial ability Resource| Definition| Example|

Land| Productive resources that come from nature| Water, trees, minerals| Labor| Human resources| Physical effort of people, knowledge and skills of people| Capital| Person-produced tools of the trade| Buildings, equipment, tools, and machines| Entrepreneurship| intelligence, imagination, and ability to take the risks that are needed to start up and maintain a business| businessmen|

* Lesson 1.03: Scarcity and Opportunity Costs
* Scarcity and Opportunity Cost
* All economic goods are scarce
* Scarcitymakes us make decisions and trade-offsopportunity cost * Trade-off- cost of choice you make
* Opportunity cost- most valued...
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