Welcome to Economics!

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28 Οκτ 2013 (πριν από 3 χρόνια και 5 μήνες)

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Welcome to Economics!

Terminology

Economics




Factors of Production

Microeconomics



Labor


Macroeconomics



Capital

Want





Entrepreneurs

Need

Scarcity

Goods

Services

Shortage


What is Economics?


The dictionary definition of Economics is that
Economics is the study of the production,
distribution, and consumption of goods and
services.


Let’s make it simple!


T
he study of how people seek to satisfy their
needs and wants by making choices.

Micro
-
Economics


Individual people and individual businesses

Macro
-
Economics


Looks at the economy as the whole

Needs


Something you must have to survive. Without
a need, you will die.

Wants


Something one would like but is not necessary
for survival.

Remember:


No matter how much money we have, we
always want more. More is better!!!



http://www.youtube.com/watch?v=48
-
tcRiBNj4


Keeping Up With the Joneses

Scarcity


Why do we always want more?


Economists believe in a concept called
scarcity
.


Scarcity is the idea that our resources are
limited but our wants and desires are
unlimited.


If you had 50 dollars what would you buy?
There are so many options but you cannot
have everything. You must choose! This is the
dilemma that economists look at.


Goods


Physical objects one can use/buy/consume

Services


Actions or activities one does for another





REMEMBER


All goods and services
we produce are
scarce.

Shortage


When a good or service is no longer available


shortages occur when producers cannot or
will not offer goods and services at the current
prices



Don’t confuse scarcity for shortage!

Factors of Production


The materials and manpower used to make all
goods and services


The three (3) Factors of Production (LLC)


Land


Labor


Capital


Land


Land refers to all natural resources not created
by human labor.


Examples
-

deserts, forests, mineral deposits,
cattle, whales, sunshine, and climate.


How are these limited?

Labor


Labor is humans with all their efforts, abilities,
and skills.


Example
-

an educated, skilled population


Factors that affect this are: growth, famine,
war, and disease.


Capital


Capital any human
-
made resource that is used
to produce other goods and or services


Examples
-

a bulldozer, the factory that built
the bulldozer, a cash register in a store.


What are some other examples?

Two Types of Capital

Physical Capital



H
uman made objects used to create or make
other goods and services


Human Capital



Knowledge and skill a worker gains through
education and experience



Entrepreneurs

Entrepreneurs are people who decide how to
combine land, labor, and capital resources to
create new goods and services.



Henry Ford


Bill Gates