Textbook Notes (368,316)
Canada (161,798)
Economics (359)
ECON 101 (172)
Chapter 1

Econ Intro Chapter 1 Microeconomics & Macroeconomics, 2 Major Economic Questions, PPF, Opportunity Cost, Self-Interest vs. Social Interest

3 Pages
Unlock Document

ECON 101
Corey Van De Waal

ECON  101  –  004:    Introduction/  Chapter  1   Microeconomics Thursday, September 16, 2010 ECONOMICS • All economic questions arise because we want more than we can have • Change in technology, environment, and global economy. Positive: information age. Negative: terrorism • Our inability to satisfy all our wants is called: scarcity p. 2 • Because we face scarcity, we must make choices • The choices we make depend on the incentives we face. • An incentive is a reward that encourages an action or a penalty that discourages an action CHAPTER 1 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: (choices individuals and businesses make, the way choices interact with markets, and the influence of the government) p. 2 MACROECONOMICS: (performance of the national and global economy) p. 2 -­‐ China, Indian, Brazil, and Russia playing a greater role in expanding global economy -­‐ Scarcity & incentives are a huge part in economics Two Major Economic Questions: 1) How do choices end up determining what, how, and for whom good and services are produced? 2) How can choices made in the pursuit of self-interest also promote the social interest? What, How, and For Whom? WHAT: Goods and services -decrease in farming and manufacturing caused by the increase in services HOW: Factors of production> production of goods and services with the usage of productive resources -­‐ Land – natural resources (minerals, oils, gas, water, air etc..) -­‐ Labour – work and time people devote to producing goods and services *quality of labour depends on human capital – knowledge from education, work experience, job-training people obtain -­‐ Capital – (investment) tools, instruments, machines, buildings that businesses use to produce goods and services *Physical capital – tools, machines, buildings etc. *Financial capital – stocks, bonds -­‐ Entrepreneurship – human resources that organize labour, land and capital Entrepreneurs come up with new ideas about what and how to produces, and make business decisions ECON  101  –  004:    Introduction/  Chapter  1   FOR WHOM: who consumes goods and services depends on the income those people earn. Those with a larger income allow a person to buy large quantity of goods and services. A small income gives a person few options and a smaller quantity of goods and services. -­‐ Land > rent -­‐ Labour > wages (earns the most income) -­‐ Capital > interest -­‐ Entrepreneurship > profit How Can the Pursuit of Self-Interest Promote the Social Interest? SELF-INTEREST: choice that is best for you -acting on economic self-interest, you are connecting with the people who produce those goods and services you buy. SOCIAL INTEREST: self-interest promotes social interest if it leads to an outcome that is best for society as a whole. *the outcome uses resources efficiently and distributes the goods and services fairly. Resources are used efficiently when goods and services are produced 1) At the lowest cost 2) In the quantities that give the greatest possible bene
More Less

Related notes for ECON 101

Log In


Join OneClass

Access over 10 million pages of study
documents for 1.3 million courses.

Sign up

Join to view


By registering, I agree to the Terms and Privacy Policies
Already have an account?
Just a few more details

So we can recommend you notes for your school.

Reset Password

Please enter below the email address you registered with and we will send you a link to reset your password.

Add your courses

Get notes from the top students in your class.