EC120 Lecture Notes - Lecture 1: Mixed Economy, Division Of Labour, Barter
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*most of the challenges faced in canada are economic. Economics: is the study of the use of scarce resources to satisfy unlimited human desires. Society"s resources are often divided into five categories called the factors of production; land, labour, capital, entrepreneurship, social capital. Labour: mental and physical human resources, entrepreneurial capacity, management skills. Capital: resources used in aiding production, tools, machinery, building. Act of making goods and services is called production. Act of using them is called consumption. Existing resources are scarce in comparison to human desires. Only enough resources to produce a fraction of the goods and services that we want. Scarcity implies the need for choice which has an associated cost- opportunity cost. Opportunity cost: is the value of the next best alternative that is forgone when one alternative is chosen. The graph shows david"s production line for apple pie and chocolate cake. The negatively sloped line indicates the boundary between attainable and unattainable combinations.
