Chapter 1-1 Notes
Economics – how people choose to make the best use of scarce resources.
Goods vs. Services
Goods – physical objects (cars, refrigerators, pencils, etc.)
Services – activities (haircuts, legal services, consulting, teaching, etc.)
Scarcity – where wants are greater than available resources.
Shortage – not a permanent condition (like scarcity usually is)
Factors of Production
What you need to produce goods and services:
Land (Natural Resources) – found in nature. Usually limited supply
Labor – effort by people/workers
Capital – human-made resources
Physical Capital – stuff used to produce other things. Ex – buildings, machines, steel, fabric, tools, etc. Helps people be more productive.
Also known as Capital Goods
Consumer Goods are meant to be used by consumers; for personal use (not in book, but you need to know)
Human Capital – knowledge and skills of workers
Entrepreneurs - people who combine the other factors of production to create things, start businesses. They take the risks.