Chapter 1

• Types of resources:

  Land

  Labor

  Capitol

  Enterprise
• 4 key economic questions:

  What to make

  How much to make

  How to make

  How to distribute
• What is economics?

  Study of people and choices
• Opportunity cost/real cost/economic cost


  The cost of what might have been chosen. Helps economists decide on a choice
• The economic problem: unlimited wants, limited resources
• PPF: production possibility frontier, helps determine opportunity costs and displays the limited market and the use of limited resources
• Technology vs PPF

  Expansion of resources vs PPF

  Unemployment vs PPF

  Normal PPF
• The market: where buyers and sellers interact, oftentimes unfair since for a market to be equal, the buyer and the seller ratio has to be 1
• Consumer goods vs Capitol goods, a key economic dilemma, Capitol helps raise economic productivity, consumer goods helps keep consumers satisfied.
• Tech vs PPF, one value is increased

  Resource expansion vs PPF, both values are increased

  Normal PPF, a curve decelerating

  Unemployment vs PPF, a point where the unemployment rate is at, shows the incapability, since the line in the limit
• Economic decision have future implications for individuals, businesses, and governments
• Price is where supply and demand meet, it is also a rationing device
• When price is higher, demand is lower
• Where supply is higher, price is higher
• Equilibrium where price and demand meet, and where supply and price meet. Equilibrium can change through changes in buying patterns of consumers or a shift in price
• Market vs planned economy, more into politics. Planned economies are completely government controlled