Introduction to Economics and basic concepts
Introduction to Economics and basic concepts 21027
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This 3 page Class Notes was uploaded by Katie Thedford on Sunday September 25, 2016. The Class Notes belongs to 21027 at Fort Lewis College taught by Kaori Takano in Fall 2016. Since its upload, it has received 3 views. For similar materials see Business in BA 110-5H at Fort Lewis College.
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Date Created: 09/25/16
BUSINESS- ECONOMICS INTRO Economics- The study of how people choose to allocate scarce resources o Goods- things people want to consume o Bads- things people don’t want to consume o Consumer Goods: Goods that are intended for final use by the consumer. o Capital Goods: Items used in the creation of other goods. factory machinery, trucks, etc. o Durable Goods: Any good that lasts more than three years when used on a regular basis. o Non-Durable Goods: Any item that lasts less than 3 years when used on a regular basis. o Services: Work that is performed for someone. Service cannot be touched or felt. o Consumers: people who use these goods and services. o Conspicuous Consumption: Use of a good or service to impress others. Scarcity exists and scarcity implies tradeoffs o Opportunity cost- the value of the best thing we give up to get something o Scarcity- The world has limited means to meet unlimited wants, so ther eis always a choice to be made People tend to choose rationally to achieve their goals, which implies that they respond to incentives to make decisions on the margin o Model- a framework for trying to understand the world o Incentive- reason for doing something o At the margin- deciding to do a little bit more or a little bit less Markets and trade tend to work well and make a better trade off o Markets- the set of buyers and sellers interacting with each other o Microeconomics- the study of the behavior of the individual o Macroeconomics- the study of the economic aggregates o “ceteris paribus”- other things the same Factors of production (cell) o Capital- investment and money o Entrepreneurs-inventive and risk taking people o Land- natural resources 2 o Labor-the work force, size, education, quality, work ethic. 3
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