ECON 20B Lecture 1: Basic Economics Introduction
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ECON 20B - Lecture 1 - Basic Economics Introduction
Scarcity
● Scarcity is the condition that arises because wants exceeds the ability of
resources to satisfy them.
●Faced with scarcity, we must make choices
—we must choose
among the
available alternatives.
●The choices we make depend on the incentives we face.
Economics - is the social science that studies the choices that individuals, businesses,
governments, and entire societies make as they cope with scarcity,
the incentives
that
influence those choices, and the arrangements that coordinate them
Economics divides into two parts:
1. Microeconomics
● The study of the choices that individuals and businesses make and the
way these choices interact and are influenced by governments
2. Macroeconomics
● The study of the aggregate (or total) effects on the national economy and
the global economy of the choices that individuals, businesses, and
governments make
What, How, and For Whom?
●What goods and services get produced and in what quantities?
●How are goods and services produced?
●For Whom are the various goods and services produced?
Goods and services - objects (goods) and actions (services) that people value and
produce to satisfy human wants
Self-interest - choices that are best for the individual who makes them
Social interest - choices that are best for society as a whole
Can choices made in self-interest also serve the social interest?
1. Globalization
● The expansion of international trade and the production of components
and services by firms in other countries
2. The Information Revolution
Document Summary
Econ 20b - lecture 1 - basic economics introduction. Scarcity is the condition that arises because wants exceeds the ability of. Faced with scarcity, we must make choices we must choose among the. The choices we make depend on the incentives we face. available alternatives. Economics - is the social science that studies the choices that individuals, businesses, governments, and entire societies make as they cope with scarcity, the incentives that influence those choices, and the arrangements that coordinate them. The study of the choices that individuals and businesses make and the way these choices interact and are influenced by governments: macroeconomics. The study of the aggregate (or total) effects on the national economy and the global economy of the choices that individuals, businesses, and governments make. Goods and services - objects (goods) and actions (services) that people value and produce to satisfy human wants. Self-interest - choices that are best for the individual who makes them.