ECON 202 Chapter Notes - Chapter 1: Opportunity Cost
Document Summary
Three core issues: what to produce with our limited sources, how to produce the goods and services we select, for whom goods and services are produced (who could get them) Lack of enough resources to satisfy all desired uses of those resources: scarcity of resources limits the amount of goods and services that can be produced. Somebody"s wants will have to go unfulfilled. Scarcity requires economic choices to be made. Factors of production: resource inputs used to produce goods and services, labor. Skills and abilities of all humans at work: land. Goods produced for use in further production: entrepreneurship. Limits to outputs: limited resources requires choices and trade-offs to be made, economics is the study of how best to allocate scarce resources among competing uses. Opportunity cost: the most desired goods or services forgone to obtain something else, when we choose to use resources to produce one thing, we must give up producing something else with those resources.
