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ECON 101 (211)
Eva Lau (7)
Chapter 1

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ECON 101
Eva Lau

ECON 101 - 1 Chapter 1 What is Economics? Economics – is the social science that studies the choices that individuals, businesses, governments and entire societies make as they cope with scarcity and the incentives that influence and reconcile those choices Microeconomics – is the study of the choice that individuals and businesses make, the way these choices interact in markets, and the influence of governments Macroeconomics – is the study of the performance of the national economy and the global economy. Scarcity – inability to get everything we want Incentive – is a reward that encourages an action or a penalty that discourages one Goods and services – objects that people value and produce to satisfy human wants - Are produced using productive resources that economists call these factors of production are grouped into the following  Land - natural resources (earns RENT)  Labor – work time and work effort (earns WAGES) o Quality of labor depends on human capital which is the knowledge and skill that people obtain from education, etc.  Capital – tools, instruments, machines, buildings, and other constructions that businesses use to produce goods and services (earns INTEREST)  Entrepreneurship – human resource organizes labor, land and capital (earns PROFIT) Can the Pursuit of Self-Interest Promote the So
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