Class Notes (806,815)
Canada (492,451)
Economics (929)

Lecture #2 - Sept 14.doc

4 Pages
Unlock Document

Western University
Economics 1021A/B
Michael Parkin

Nicole Wallenburg Economics Wednesday, September 14, 2011 Economics - Lecture Notes Wednesday, September 14 What is Economics? DEFINITION: Economics is the social science that studies the choices that individuals, businesses, governments, and societies make as they cope with scarcity and the incen- tives that influence and reconcile those choices. • All economic questions arise because we want more than we can get • Our ability to satisfy all our wants in called scarcity • Because we face scarcity, we must make choices • The choice we make depend on the incentive we face • An incentive is a reward that encourages or a penalty that discourages an action The subject is divided into two parts: Microeconomics and Macroeconomics Microeconomics is The study of choices made by individuals and businesses, and the influence of government on those choices Macroeconomics is the study of the effects on the national and global economy of the choices that individuals, businesses, and governments make Two Big Economics Questions - Two big questions summarize the scope of economics: - How do choices end up determining what, how and for whom goods ****** What, How, and For Whom WHAT? - Good and services are the objects that people value and produce to satisfy wants - What shall we produce - What we produce changes over time - Sixty years ago, almost 20% of Canadians worked on farms: Today that number is 3% - Today almost 80% of Canadians provide services - Everything comes from production lines HOW? - Goods and services are produced by using productive resources that economists call factors of production Nicole Wallenburg Economics Wednesday, September 14, 2011 - Land: everything nature gives to us - any feature of the planet - Labour: work time and effort of people - Capital: the tools, machines, equipment, and other constructions that are used to pro- duce goods and services - Human Capital: the knowledge and skill that people obtain from eduction, on-the-job training, and whorl experience - Entrepreneurship: the human resources that organizes land, labour, and capital - Noth- ing would happen without entrepreneurship - rewarded from a different way than labour FOR WHOM? - Who gets the goods and services depend on the incomes that people earn - Land: earns rent - Labour: earns wages (biggest factor of production) - Capital: earns interest - Entrepreneurship: earns profit When is the Pursuit of Self-Interest in the Social Interest Every day, 7 billion people make economic choices that result in "What, How, and For Whom" goods and services get produced - Do we produce the right things in the right quantities? - Do we use our factors of production ***** - *** You make choices that are in your self-interest - choices that you think are best for you (or benefit someone else) Choices that are best for society as a whole are said to be in the social interest - We aren't wasting resources Is it possible that when each one of us makes choices that are in our self-interest, it also turns out that theses choices are also in the social interest? Questions that illiterate the tension between self-interest and the socia
More Less

Related notes for Economics 1021A/B

Log In


Don't have an account?

Join OneClass

Access over 10 million pages of study
documents for 1.3 million courses.

Sign up

Join to view


By registering, I agree to the Terms and Privacy Policies
Already have an account?
Just a few more details

So we can recommend you notes for your school.

Reset Password

Please enter below the email address you registered with and we will send you a link to reset your password.

Add your courses

Get notes from the top students in your class.