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What is Economics

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What is Economics Chapter 1 Economics The study of how people satisfy wants with scarce resources. (Noble Prize winning Economist Milton Friedman) Scarcity The ... – PowerPoint PPT presentation

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Title: What is Economics


1
What is Economics
  • Chapter 1

2
Economics
  • The study of how people satisfy wants with scarce
    resources. (Noble Prize winning Economist Milton
    Friedman)

3
Scarcity
  • The condition where unlimited human wants face
    limited resources.

4
Microeconomics
  • The study of the choices made by economic
  • actors such as households, companies and
  • individual markets.

5
Marcoeconomics
  • Behavior of entire economies.
  • For example, unemployment in the United
  • States is a macroeconomic topic.

6
Three basic questions in Economics
  • What must we produce-based on consumer
  • needs and wants.
  • How should we produce it-based on
  • resources.
  • For whom should we produce it- specify
  • consumer interests.

7
How do we make Economic Decisions?
  • Need- Required for survival
  • Want- Desired for satisfaction
  • Goods- Physical, or tangible, objects that
  • can be purchased.
  • Services-Actions such as plumbing,
  • teaching and taxi driving that people purchase.

8
Factors of Production
  • Necessary resources to produce what
  • people want and need.
  • Land
  • Capital
  • Labor
  • Entrepreneurship

9
Land
  • Societys limited natural resources-
  • landforms, minerals, vegetation, animal life
  • and climate.

10
Capital
  • The means by which something is produced
  • such as money, tools, equipment, machinery
  • and factories.

11
Labor
  • Workers who apply their efforts, abilities,
  • and skills to production.

12
Entrepreneurship
  • Risk-takers who combine the land, labor and
  • capital into new products or services.
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