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Econ 1021 – Chap 1

Course Code
ECON 1021A/B
Jeannie Gillmore

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Econ 1021 Chap 1
1.1 Intro to Econ
Scarcity inability to get everything we want it’s universal
Must make choices cannot have best of both words
Incentive reward that encourages an action / penalty that discourages one
Eg. Price of laptop too low less supply than demanded
Price too high supply than demand
Economics social sci that studies choices that indiv, businesses, gov, entire
societies make as they cope with scarcity and incentives that influence and reconcile
those choices
Micro econ - study of choices indiv and business make
Macro econ study of performance of national econ, global econ
Two Big Econ Questions
How do choices end up determining what, how and for whom goods and
services are produced
When do choices made in pursuit of self-interest also promote social interest
Goods and services objects people value + produce to satisfy human wants
Goods physical objects cell phones
Services tasks performed
For what, how and for whom?
WHAT? What produced various across countries changes over time
produced by using factors of production resources business use to
produce goods and services
Land “gifts of nature” (natural resource) used to produce goods and services
Labour work time + effort (physical + mental) to produce goods and services
Quality of labour depends on human capital knowledge and skill people obtain
from education, on-job training and work exp expands over time
Capital tools, instruments, machines, buildings, constructions businesses use to
produce goods/services
financial capital money, stocks, bonds
allow business to borrow funds to buy physical capital
b/c not used to produce goods/services not productive resource
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