GEOG 1HB3 Lecture Notes - Planned Economy, Mixed Economy, Opportunity Cost
7 Feb 2013
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Lecture 1 sep/12/2012 chapters 1, 2 (partial) basic principles and glossary of terms for. Economics: study of how society allocates scarce resources to satisfy people"s unlimited wants. Scarcity: society has limited resources and therefore can"t produce all the goods + services people wish to have. Microeconomics: focus on individual parts of the economy. How households + firms make decisions+ how they interact in specific markets. Market economy: allocates resources through the decentralized decisions of firms + households. Households decide what to buy, and who to work for. Firms decide who to hire, and how much to produce. Command or centrally planned economy: all production and distribution decisions are made by a central authority, like a government. Traditional economy: economic decisions are based on customs, beliefs, region, and habits. Term is often used to refer to underdeveloped economies that rely heavily on agriculture for domestic consumption (subsistence economy). Mixed economies: combination of market and command economies.
