Econ Unit 1

Microeconomics: approaches study of economics from the viewpoint of individual households and firms
approaches the study of economics from the viewpoint of the economy as a whole (households, firms, government, the rest of the world)
A situation in which unlimited wants exceed the limited resources available to fulfill those wants
Land Labor Capital
Productive Resource/Factors of Production
Natural resources, human, capital, entreprenuers
Resources are scarce why?
they’re limited
3 Questions for Production
How?- efficiency What?- allocation For whom?-distribution
Analyzing economics looks at what?
GDP, unemployment rate, tax rates
use theory to show how yesterday’s and today’s economic activities will affect potential future activity- how gvmt. spending today may affect the National Debt
Economic theory
a simplification of an economic reality that is used to make predictions about the real world.
More detail =
more difficult to understand and less useful
Ceteris Parabis
“all other things held constant”
incremental, additional
comparing the marginal benefit to the marginal cost
economic choice
Opportunity cost
wants are scarce because resources are scarce
marginal benefit
extra benefit from consuming one more unit of a good or service
marginal cost
Extra cost of producing one additional unit of production.
Any point below the Production possibilities curve
curve and points on a curve on the line
nation and business operating efficiently, resources are fixed to qualitative and quantitative, technology
How the society answers the 3 Questions for Production defines their….
economic society
What role does the gov’t play in protecting consumers?