ECON 102 Chapter Notes - Chapter 1: Inductive Reasoning, Price System, Free Market
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ECON 102 Full Course Notes
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Economics - the study of how people allocate their limited resources to satisfy their unlimited wants. Labor - physical and mental efforts of human beings. Capital - anything that are produce which in turns is used to produce other goods and services. Human capital - skills developed by education and training. Entrepreneurship - the ability to recognize profitable opportunities to put together the resources necessary to take advantage of them. Microeconomics - the study of decision making undertaken by individual economics agents. Macroeconomics - the study of the economy as a whole. 3 basic micro questions: what to produce, how to produce, for whom to produce. Command economy - a central authority makes these decisions. *markets determine the answers to the 3 questions* Market - any place that buyers and sellers come together to make exchanges. Scientific method: make observations, use inductive reasoning to make theories, test theories, modify theories.
