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Chapter 1&2

Microeconomics Chapter 1 & 2 Textbook Notes

4 Pages

Course Code
Economics 1021A/B
Meaghan Ross

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Chapter 12pp 19 1325 2940Chapter 1What is EconomicsEconomicsSocial 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 choicesoScarcityOur inability to get everything we wantoIncentiveReward that encourages an action or a penalty that discourages an actionMicroeconomics is the study of the choices made by individuals and businesses 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 Two Big Economic Questions1How do choices end up determining what how and for whom good and services are producedGood and ServicesObjects that people value and produce to satisfy human wantsWhatCanadas total production Agriculture Manufactured goods ServicesoWhat determines the patterns of production Canadas 78 service and 2 AgricultureHowGoods and services are produced by using productive resources that are called Factors of ProductionoLandAlso refers to natural resourcesoLabour The work time and work effort that people devote to producing good and services The quality of labour depends on Human Capital It is the knowledge and skill that people obtain from education training and work experienceoCapitalTools instruments machines building and other constructions that businesses use to produce goods and servicesMoney stocks bonds are Financial CapitaloEntrepreneurshipthe human resources that organizes labour land and capitalFor WhomWho consumes the goods and services that are produced depends on their incomes 2Can the choices that people make in the pursuit of their own self interest also promote the broader social interestSelfInterestA choice is in ones selfinterest if one thinks that choice is best for himherself
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