PSY 102 Chapter Notes - Chapter 1: Timbits, Opportunity Cost, Human Capital
3 May 2016
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Principles that involve individual choice: the core of economics. Individual choice: decisions by an individual about what to do and what not to do. The principles of individual choice: people must make choices because resources are scarce. Resource: anything that can be used to produce something else (resources are limited) Example: economy resources usually begin with land, labour (the time of workers), capital (machinery, building, and other manufactured productive assets), and human capital (educational achievements and skills of workers). A resource is scarce: when there is not enough of the resource available to satisfy all the ways a society wants to use it. Example: natural resources (resources that come from the physical environment such as minerals, lumber, and petroleum) human resources (labour, skill and intelligence) Sum of individual decisions: each of many individuals in the economy makes their own choice about where to shop, and the overall choice is the sum of those individual decisions.
