ECO1104 Sep. 10 , 2013
YUJIE YI #7038840
OFFICE HOURS: Monday& Wednesday 10:30-12:00
Location: FSS 9 floor office: #9045
Scarcity: the limited nature of society’s resources
Economics: the study of how society manages its scarce resources
Efficiency: the property of society getting the most it can from its scarce
Equity: the property of distributing economic prosperity fairly among the
members of society
Opportunity cost: whatever must be given up to obtain some item
INTRODUCTION TO MICROECONOMICS
1 /5 “What makes us take/ what motivates human behavior?”
Material world: human wants are unlimited because people are greedy.
Human wants are partially satisfied by producing and then consuming goods
People analyze the nature of:
-Production activities- theory of the FIRM
-Consumption activities- theory of the CONSUMER
-Exchange activities- coordination between them – theory of MARKETS
Supply function is based on the firms.
Two primary types of ECONOMIC ACTORS: consumers & producers who
interact/ exchange within markets in a capitalist ECONOMY.
An ECONOMY is an institution in which these actors produce, consume, and
Economy types: centrally planned economy, Robinson Road economy (no
market at all, one producer, one consumer)
Most developed economy: market economy!
Any economy produces goods and services by combining RESOURCES
(land, labour, capital) into a TECHNOLOGY OF PRODUCTION. ECO1104 Sep. 10 , 2013
YUJIE YI #7038840
Three primary factors of production:
-Land: natural resources or any derivative. Thereof: crops, mineral, land itself
(on which buildings and structures LIES)
-Labour: human efforts
-Capital: something that is used to make something else: structures, vehicles,
plant & equipment, machinery. It is not altered or consumed in the production
process, but it does depreciate.
Technology of production: “HOW TO” how to produce, how to combine,
what’s the recipe.