ECN 102 Lecture 12: ECON 1000 TEST 1
Document Summary
Scarcity: our inability to satisfy all our wants. Choices: what we must make because we face scarcity. Incentive: a reward that encourages an action or a penalty that discourages an action: the choices we make depend on the incentives we face. Economics: the social science that studies the choices that individuals, businesses, governments, and entire societies make as they cope with scarcity and the incentives that influence and reconcile those choices. Economics divides in to main parts: microeconomics: the study of choices that individuals and businesses make, the way those choices interact in markets, and the influence of governments. Example of a microeconomic question is: why are people buying more e-books and fewer hard copy books: macroeconomics: the study of the performance of the national and global economies. Goods and services: are the objects that people value and produce to satisfy human wants. Factors of production: goods and services are produced by using productive resources.
