Econ 201 1st Edition Lecture 1Outline of Last Lecture Outline of Current Lecture 1.Ten principles Economic OverviewCurrent LectureWhat is Economics About? An OverviewSometimes presented as a series of questions :1. What will be produced?2. How will it be produced? 3. For whom will it be produced? i.e. Who receives the products? • Scarcity of resources requires answers to these questions.• Economics is about how a society answers them. • Efficiency and Equity (or Fairness) result from the answers.– Inefficiency and Inequity may also be the results.What is Economics About? ~ Dr L’s Overview• Economics is about how societies organize and carry out production and distribution of the goods and services people need or want in their lives. • Production: The conversion of inputs (resources) into outputs (goods and services).• Production by: Households, Firms*, Governments, Other organizations (NGOs)– Mostly by Firms.These notes represent a detailed interpretation of the professor’s lecture. GradeBuddy is best used as a supplement to your own notes, not as a substitute.• Distribution by: Markets*, Government, Other social organizations (Families, NGOs)– Mostly by Markets.What is Economics About? ~ Linking Two Perspectives• Producers – of whatever type - make the direct decisions on Whatand How to produce. But they are guided by: a. Income incentives (including profit) that arise from market interactions; b. Personal success incentives expressed in bureaucratic, political and personal interactions.• In a sense, consumers and voters guide a society’s production decisions, but indirectly. • The For Whom question is also answered in two ways:a. By earning income, which is spent on products. Income is determined by ownership of resources used in production. b. By rights of access to products, which are fixed by custom or
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