ECN 211 Lecture Notes - Mira-Bhayandar Municipal Corporation, Fallacy, Free Good
Document Summary
Modeling: human nature and reality, people have unlimited wants, most people in the economy want more. What is the result of that: clarifying concepts, scarcity means that not enough is available for free, there are limited availability for a set price for the items wanted, during military times there was a rationing. A way of allocating goods because there was not enough for everyone: there is something wrong in the distribution network, a shortage occurs when not enough is available at the current price. The sun is a free source: poverty occurs when the goods are scarce, and those who need them do not have the income to obtain them. In a market economy the consumer chooses the products because the producers will produce what consumers want to buy: how to produce, what technology the producer will choose to use. Whether it be technology, outsourcing, labor etc: more capital less labor, more labor less capital.
