EC120 Chapter Notes - Chapter 1: Externality, Market Power, Invisible Hand
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EC120 Full Course Notes
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Society has limited resources and therefore cannot produce all the goods and services demanded. Decide what jobs will be done and who will do them. Needs some people to grow food, make clothing, design computer software, etc. Once society has allocated people (and land, buildings, and machines) to various jobs it must allocate the output of goods and services that they produce. Who will eat potatoes and who will eat apples. The management of society"s resources is important because resources are scarce. Economics-the study of how society manages its scarce resources. Economists analyze forces and trends that affect the economy as a whole, including: The fraction of the population that cannot find work. Economy-a group of people interacting with one another as they go about their lives. To get one thing we must give up another thing that we may like. A family has to decide how to spend their income.
