ECON 202 1st Edition Lecture 1 Outline of Current Lecture II What is Economics III Scarcity IV Defining Opportunity Cost V Defining Economic Resources VI Normative vs Positive Economics Current Lecture Module 1 The Study of Economics What is Economics Economics is a fusion of many components money trade offs people supply and demand opportunity cost business and scarcity Economics is the study of scarcity and choice Scarce a resource that is not available in sufficient quantities to satisfy all the various ways a society wants to use it Scarcity means that there are not enough resources for everyone Resources are finite Trade offs have to be made Individual Choice is the decisions by individuals about what to do which necessarily involve decisions about what not to do Economy is a system for coordinating a society s productive and consumptive activities Market Economy the decisions of individual producers and consumers largely determine what how and for whom to produce with little government involvement in the decisions Resource is anything that can be used to produce something else 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 Land refers to all resources that come from nature such as minerals timber and petroleum Labor is the effort of workers Physical Capital refers to manufactured goods used to make other goods and services Human Capital the educational achievements and skills of the labor which enhance its productivity Opportunity Cost the real cost of something is what you must give up to get it Microeconomics is the study of how people make decisions and how those decisions interact Macroeconomics is concerned with the overall ups and downs of the economy Economic Aggregates are economic measures that summarize data across many different markets Normative Economics vs Positive Economics Positive Economics is the branch of economic analysis that describes the way the economy actually represents It s a fact Normative Economics makes prescriptions about the way the economy should work It s an opinion