Economics Ch. 1 Notes - Essential Foundations of Economics.pdf

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ECON 203
Richard Coe

Economics Ch 1 Notesscarcity the condition that arises because wants exceed the ability of resources to satisfy themeconomics the social science that studies the choices that individuals businesses governments and entire societies make as they cope with scarcity the incentives that inuence those choices and the arrangements that coordinate themHuman wants exceed the resources available to usOur ability to satisfy our wants is limited by the time we have incomes we earn and the prices we pay for the things we buyResources gifts of nature our laboringenuity and the toolsequipment that weve madeQuestions economists ask How do choices end up determining what how and for whom goods and services get produced When do choices made in the pursuit of selfinterest also promote the social interestgoods and servicesthe objects goods and the actions services that people valuce and produce to satisfy human wantsGoods are objects that satisfy wants ex running shoes ketchupServices are actions that satisfy wants ex hair cutsrock concertsWhat determines the quantities of corn we grow home we build and healthcare services we produceHow are good and services producedFor whom are goodsservices produces The answer depends on the income that people earn and the prices they pay for the goodsservices they buyEconomics explains how the choices that individuals businesses and governments make and the interactions of those choices end up determining what how and for whom goods and services get producedWhen is the pursuit of selfinterest in the social interestHow much gets produces how they are produced and who gets to enjoy themAre the goodsservices produced and the quantities in which they are produced the right ones
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