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Copy of Fundamentals of economics

Published on Aug 05, 2016

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PRESENTATION OUTLINE

Fundamentals of economics

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Economics

  • Study of how people seek to satisfy their needs and wants by making choices
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Needs

nECESSARY THINGS FOR SURVIVAL

wants

Items that are desired but not NECESSARY to survive 

Goods

Physical objects such as shoes and shirts
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services

Activities one person performs for another

Scarcity

Limited quantities of RESOURCES to meet unlimited wants 
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Shortage

When producers will not and can't offer goods at price
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opportunity cost

Most desirable alternative given up as the result of a decision

Trade offs

alternative that is sacrifice when you choose one action over another

Factors of production

Resources use to make up all good and services

Land

All natural resources used to produce goods and services

Labor

EFFORT A PERSON DEVOTES TO A TASK WHICH THAT PERSON IS PAID

Capital

2 types: Physical and Human

Physical capital

Human made objects used to create other goods and services

Human Capital

KNOWLEDGE AND SKILLS A WORKER GAINS THROUGH EDUCATION AND EXPERIENCES

Entrepreneurs

Takes a risk to start a business

Marginal cost

additional cost of producing one more unit of a good

Marginal benefit

additional value of consuming one more unit of a good