01:220:102 Chapter Notes - Chapter 1: Positive Statement

• School: Rutgers University
• Department: Economic
• Course: 01:220:102
• Professor: Erin Fairweather

Document Summary

Incentive- reward that encourages an action or penalty that discourages one. Economics- 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- study of the choices that individuals and businesses make, the way these choices interact in markets, and the influence of governments. Macroeconomics- study of the performance of the national economy and the global economy. Goods and services are produced by using productive resources that is called factors of production- land, labor, capital, entrepreneurship. Land- natural resources used to produce goods and services. Labor- work time and work effort that people devote to producing goods and services includes physical and mental efforts of all the people who work on farms and construction sites and in factories, shops, and offices. Quality of labor depends on human capital- knowledge and skill that people obtain from education, on-the-job training, and work experience.