ECON-101 Lecture 2 Notes – Chapter 1: What is Economics?
Definition of Economic
• We want more than we can get
o Scarcity – inability to fulfill our wants -> choices -> incentive – reward or penalty
of different choices e.g. price
• Microeconomics – individuals, businesses
o Why do people shop on Amazon?
• Macroeconomics – national and global economy
o What happened in the US in 2008?
Two Big Economic Questions
• How do choices affect what, how, for whom goods and services are produced?
o What: varies across countries and changes over time
o How: depends on the technology and resources available -> factors of
§ Land: gifts of nature: water, oil, minerals, air, gas, coal, air, forests, fish,
§ Labour: work time and effort that people devote
§ Capital: tools, instruments, machines, buildings
• Does not include financial capital (money)
§ Entrepreneurship: person organizing it all