01:220:102 Lecture Notes - Lecture 1: Profit Motive, Opportunity Cost, The Incentive

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Published on 12 Oct 2018
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ECON 102 Lecture 1 - Introduction
Definition of Economics
- Economics - comes from the Greek word "okionomia", which roughly translates
to "household management"
- Economics is a social science, which is analyzes the aspects of social behaviors
and institutions that are involved in using the scarce resources to produce and
distribute limited goods and services to satisfy unlimited human wants.
- An understanding of economics in necessary to be an informed citizen
- Macroeconomics deals with the economies as a whole thus focusing on inflation,
GDP, etc.
- Microeconomics deal with the decision making of individuals, households and
how those relate to cost and profits
Free Market vs Socialism
Characteristics of Command Economies:
- No such thing as private property
- Everything is government owned
- Economy controlled by central planning board(wages, prices, supply, etc.)
Characteristics of Free Market Economies
- Invisible Hand (Supply and Demand are organic; price controlled by consumer)
- Private Property
- Free Enterprise
- Entrepreneurship driven by profit motive
Communism vs. Socialism
- Both are command systems
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