Scarcity (Econ deﬁnition)--you have to give something up in order to get more of
Scarcity (general deﬁnition)--something that is just generally unavailable
4 activities--resource maintenance,production,distribution,and consumption of
goods and services.
Distribution? Specializing in transaction cost
Transaction costs! EX stubhub charging to print,ikea with all the time spent
in the store
Intermediate goals--taking voice classes,getting a job
Final goals--being able to sing well,being self sufﬁcient
Economic actor--anyone/thing that is involved with a transaction
Externality is a side effect on people who aren't directly involved,
Negative externalities--second hand smoke,falling on ice while walking,
Positive externalities--public transportation (reduce time,more efﬁcient,reduced
WHICH goods and services do we produce?
- what people want
HOW do we produce them?
- the most efﬁcient way
WHO gets them?
- whoever can pay for it
The economy is just the system use to allocate goods and services,through
which producers and consumers interact.An allocation system.
Traditional economy--resources allocated according to long-lived practices of e
past.Could be top down.EX:Bartering,trading services
Command economy--the gov't determines everything EX:North Korea
Which goods?Whatever people decide to produce
How?The cheapest way,or however
Who?Whoever decides to buy them
Why? It's what best describes most of the interactions you'll face in this country Market--a collection of consumers and producers with the possibility for
exchange.Not necessarily a physical space.They play a role in allocating resources