AUDI DODGE

HAMPTONS NEWPORT BEACH

Although your wants/desires are virtually unlimited, the productive resources available to help satisfy those wants are scarce

Scarcity – condition facing all societies b/c there are not enough productive resources to satisfy people’s unlimited wants

Productive resources – inputs used to produce goods/services that people want• Also known as factors of production

Productive resources are scarce when they are not freely available• You must choose among your many wants• Can’t satisfy all wants

Economics – examines how people use their scarce resources to satisfy their unlimited wants

Taxi cab driver• The cab• Knowledge of the city• Driving skills• Gasoline• Time

Human – human efforts used to produce goods/services• Also known as labor

Natural – “gifts of nature”

Renewable – resource that can be drawn on indefinitely if used wisely

Exhaustible – resource available in a limited amount

Capital – all human creations used to produce goods/services• Factories• Trucks• Machines• Buildings• Money

Entrepreneur – person who develops a new product/process and assumes the risk of profit/loss

GOOD SERVICE

Something that is tangible; you can see, feel, and touch

Requires scarce resources to produce

Satisfies human wants

Something that is intangible;

Requires scarce resources to produce

Satisfies human wants

MICROECONOMICS MACROECONOMICS

Market economics

Focuses on the economic behaviors of everyone making choices

Individual pieces of the economic puzzle

National economics

Focuses on the performance of the economy as a whole

Fits all of the puzzle pieces together to look at the big picture

POSITIVE STATEMENT NORMATIVE STATEMENT

Statement about the economic reality that can be supported/rejected with facts

Concerned with “what is”

Statement about the economic reality that reflects one’s opinion

Concerned with “what should be”

Opportunity cost – the value of the best alternative you must pass up

Also can be looked as the opportunity lost

What goods/services will be produced?

How will they be produced?

For whom will they be produced?