Economic Way of Thinking

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Chapter 1

I.An Economic way of Thinking

What's Economics?
-The study of choices people make to satisfy their needs and wants. -It is the study of how society choose to use it's scarce resources to satisfy it's unlimited needs and wants. Economists:
-Someone who studies the choices that people make.
-Someone who studies the economic theory and applies it to the real world. Economic Actions:
1.Micro-economic: Study of one single factor of economy. (Mobile co.) 2.Macro Economic: Study of the entire economy.
Economic Decisions: (2 major economic makers)
1.Consumers (buy goods and services).
2.Producers (provide goods and services).
- The network of these decisions is the basis of all the economic theory. Economic classify:
1.Goods (needs necessary for survival)
2.Wants (needs beyond what is necessary for survival).
- Goods (something physical).- Services (activities).
Economic resources:
A resource: Anything that people use to obtain What they need or want. Resources are used to produce goods and services, They are called factors of production. Factors Of Production:
1.Natural Resources: Farmlands, Oil Fields, Wind, Rain, and Sunlight. 2.Human Resources: Teacher, Dentist.
3.Capital Resources: Capital Goods, and Consumer Goods.
4.Technology: A Human Resource based on Natural or Capital resources (Computers). 5.Entrepreneurship: Michael Dell, And John Ford, Osman Trading co. Capital resources:
Items used in the production of other goods and services. Example: Buildings, Machinery, Factories, and Dams. Capital Good:
Items used in making finished products. (Pcs)
Using Technical Knowledge and methods to create new products or improve the Existing ones. (PC advances) Entrepreneurship:
The organizational abilities that are taking the risk of a new business. Entrepreneur:
Someone who takes a risk in making a business or project that might fail.

II.Scarcity And Choice!!

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