Econ 100 1st Edition Lecture 1Outline of Current Lecture I. EconomicsA. Microeconomics vs. MacroeconomicsII. Two Big Economic QuestionsA. What, how, and for whom?1. Factors of ProductionB. Self-Interest vs. Social-Interest1. Efficiency2. EquityCurrent Lecture- Economy- “The one who manages households” - The study of choices and their consequences- We want more than we can get- Our inability to satisfy all we want = scarcity- Because of scarcity we must make choices- Choices depend on incentives (a reward that encourages an action or a penalty that discourages an action)- Economics - The social science that studies the choices that individuals, businesses, governments,and entire societies make as they cope with scarcity and the incentives that influences and reconcile those choices- Microeconomics – individuals and businesses and their choices, the way these choices interact in markets, and the influence of governments- Macroeconomics – performance of the national economy and the global economy- Two Big Economic Questions1. How do choices end up determining what, how, and for whom goods and services are produced?- Goods/Services = objects that people value and produce to satisfy human wants- What? Percent of total production (agriculture, services, goods)- How? Goods/services are produced using productive resources called factors of production Land – natural resourcesThese 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. Labor – effort of humans, quality depends on knowledge, skill, experience (human capital) Capital – tools businesses use to produce goods/services Entrepreneurship – human resource that organizes land, labor, and capital- For whom? Depends on individuals income Land earns rent Labor earns wages (most income) Capital earns interest Entrepreneurship earns profit2. Does the pursuit of self-interest unintentionally promote the social-interest?- People make choices to pursue self-interest- Social-interest benefits society as a whole Efficiency – resource use is efficient if it is not possible to make someone better off without making someone else worse off Equity – fairness, variety of views about what is fair, does social-interest require
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